As credit tightens, Bizfi doubles down on platform strategy

Bizfi has transformed and morphed since its launch in 2005. Founder Stephen Sheinbaum started the company as a balance sheet lender but around 2009 started seeing more loan demand than the young company could fulfill. So the company opened itself up to other funding partners, and now provides an experience where business owners can come and receive automated, real-time quotes from bank and non-bank lenders who can provide all types of financing.

It’s the 45 lending partners, 15 of whom are directly integrated into the Bizfi platform, that differentiate the company from some of its competitors, which include CAN Capital and OnDeck. While other lenders have what Sheinbaum calls their credit “box”, having a marketplace alongside Bizfi’s own lending offering gives customers a lot of choices for financing.  “Think of us like Progressive, with our own offers next to our peers,” he said.

Since inception, Bizfi has enabled almost $2 billion of loan originations, using its own balance sheet to still fund about 30 percent of the $20 million monthly done on the platform.

Bizfi’s marketplace isn’t just about providing other sources of capital. Participating lenders populate payment and collection data back to the platform, so that BizFi keeps a sort of general ledger on the life of the loan. Bizfi manages the ongoing relationship with the borrower and can leverage its 100 sales reps to continue to provide service and alternative financing options during the life of a loan and after.

Sheinbaum personally heads the company’s business development strategy, pursuing partnerships to help build distribution. It recently signed a deal with Jack Henry and Associates, so that loan officers at FIs that use JHA’s core banking technology can use BizFi to help monetize declines and provide needed financing. Bizfi also cut a deal this year with the Western Bankers Association, a trade group of over 600 community and regional banks.

“We’re looking to partner with strategics who can help get us out there,” Sheinbaum said. “The Intruits, merchant processors…anyone dealing with small businesses, we want to talk.”

Biz dev deals like these are strategic for the company and helped drive the recent hire of Lending Club founding employee, John Donovan, to the position of CEO. A 30 year alternative finance and payments veteran, Donovan is expected to help the company scale its hybrid lending platform and execute on more top line initiatives, such as signing similar partnerships to the ones the company bagged, like Jack Henry.

Donovan, with his experience taking Lending Club public, may also signal an eventual interest in tapping public markets. But for now, Sheinbaum is focused on the firm’s first institutional equity round and ramping the business.

“We’ll reevaluate going public after we have an immediate equity partner in our business,” he remarked. “We have new products rolling out in the first quarter. As more business see that they have alternative financing options, we continue to grow.”

The Startups: Who’s shaking things up (Week ending December 20th, 2015)

fintech startups shaking things up

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming weekly newsletter.[/alert]

Pave Raises $300 Million In The Latest Online Lending Push (WSJ)
Interest rates, schminterest rates. The flood of credit flowing into online lenders just won’t stop.

What digital wealth management can learn from successful online brokers with MyVest’s Charlie Haims (Tradestreaming)
Charlie Haims has been influential in the success of Internet brokerage and now heads up marketing at MyVest – a tool that migrates wealth managers online, giving them their own “robo” solution.

Mitsubishi UFJ Ties Up With Fintech Venture on Investing App (Bloomberg)
Mitsubishi UFJ struck a deal with a financial technology company in a bid to boost investment trust sales by providing information through a smartphone app.

nTrust’s Rod Hsu on differentiating in the competitive payments space (Tradestreaming)
nTrust bridges payments across borders in its own way and is gunning for leadership globally from its Canadian home base.

Trulioo Raises $15M from American Express, Others (TechVibes)
Trulioo has raised $15 million from American Express Ventures and existing investors. Read Tradestreaming’s recent interview with Trulioo founder and CEO here.

Bizfi Nabs $65M In New Funding (PYMNTS)
Alternative small business lending platform Bizfi announces $65 million in new funding.

TransferGo secures $2.5M investment round (Finextra)
TransferGo has secured a $2.5M seed round led by Mark Ransford, former investor at Apax Partners; Voria Fattahi, former investor at Kinnevik; Clive Kahn, former Travelex CEO; and Richard Tudor, former partner at Exponent.

Yirendai IPO Could Pave Way for More Fintech Listings (WSJ)
Chinese online peer-to-peer lender Yirendai raised $75 million in an IPO on the New York Stock Exchange, opening the door to a possible wave of fintech listings.

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