The 2016 Tradestreaming Awards winners: Online lenders

We’ve focused so much on the travails of the marketplace lending industry that we haven’t given enough attention to the amount of innovation that’s going into online lending in general. We hone in too much on the headline numbers. The addiction to growth, and the subsequent slowdown in just part of the industry, belies the fact that there’s a ton of things happening that are worthy of our attention.

The Tradestreaming Awards are a step in the right direction towards recognizing the talent, energy, and vision that are required to create great digital financial products.  The following are our inaugural winners in the lending category.

Best Online Consumer Lender

This was an award that went to a consumer lender with the best overall user experience, product selection, and potential to massively grow its online business.

Winner: CommonBond


As an online student loan refinancing platform, CommonBond helps people save up to $14,000 over the life of their loans. And it does so through a friendly, easy-to-use interface and responsive, outstanding customer service cited by many customers.

The company takes its community approach seriously, pledging money to education for children in need as part of every loan it refinances. Now, with its new 401(k) product, CommonBond enables employers to turn debt repayment into an employee perk.

Best Online Business Lender

This went to a lender targeting businesses with engaging products followed by a great user experience.

Winner: Behalf


Behalf’s version of on-demand purchase financing is changing the way vendors work with their business customers. Through a nearly instantaneous credit application, Behalf essentially offers vendors an outsourced financing unit that provides short term loans to their customers. Business customers use Behalf to quickly finance individual purchases, some of which are eligible for fee free net terms. The firm scored 9.1 on TrustPilot with 150 reviews.

Most Innovative Lender

Tradestreaming recognizes a lender that thinks out of the box with creative product design, marketing campaigns, and user experience.

Winner: FastPay


Founded in 2009, FastPay has financed over $1.5 billion in media receivables for digital media businesses. Companies can quickly apply by entering some financial and bank account information either directly or through the firm’s integrations with accounting software like QuickBooks. Once approved, businesses can upload invoices or link their media dashboards like Google or AppNexus. Invoices get verified and FastPay advances a percentage of funds up front and rebates the remaining amount once a client pays an invoice.

Come join these award winners at our first Tradestreaming Money Conference as we explore the impact technology is having on big finance.


What fintech companies can gain from a corporate giving program

Fintech companies targeting the millennial workforce will have to do more than just talk about social causes if they want to win over millennials – a 2015 study released by Cone Communications found that 70% of US millennials consider companies’ social and environmental commitments in deciding where to work.

As an example of how the mashup of Corporate Social Responsibility (CSR) and hiring trends is already playing out in fintech, leading student loan platform CommonBond credits its social mission with bringing in exciting new millennial talent to the company. CommonBond’s 1-for-1 giving model has it fund the education of a child in need with every loan it funds. “On the recruiting side, it’s one of the reasons we get 300 to 400 applications for every role we have,” said David Klein, CEO of CommonBond. “It’s also one of the reasons why we have an acceptance rate of 85% for every job we offer.”

In terms of consumer acquisition, 50 percent of the company’s customers reach the company through word of mouth — the largest figure of anyone in the student loan industry, according to Klein. “We think at least a part of that is the fact that we have a social mission and not everybody does,” he explained.

The statistics agree with him. A 2015 study by global performance management company Nielsen found that 73 percent of millennials — the biggest percentage of any age group surveyed — are willing to pay extra for sustainable offerings from brands.

CSRs can also help companies ignite and maintain employee enthusiasm. Tmura, an Israeli public service venture fund which enables venture capitalists and high tech companies to contribute equity shares and then allocate the proceeds to charity upon a liquidity event, has seen firsthand what share donation can do for company morale.

Baruch Lipman, executive director of Tmura, points to Waze, the Israeli map and driving app, as an example of a company that was able to involve to involve its employees in the giving process following the company’s $1.15 billion acquisition by Google in 2013.

“After the exit, Waze asked us for a shortlist of nonprofits, and the employees actually voted on where they wanted the funding to go,” said Lipman. “Waze CEO Noam Bardin got up in front of all of the employees and said ‘Look, all of you employees should be very proud of the fact that as part of our acquisition we collectively gave $1.5 million to charity.'”

The nonprofits chosen to receive the allocation returned to Waze to present progress reports after several months, which showed the employees, in a very tangible way, what they were able to accomplish with their donation.

Lipman noted that donating shares to charity can also impact a tech company at the corporate level. The organization’s events serve as a networking opportunity for VCs and tech companies. Moreover, Lipman sometimes finds himself making connections between smaller and bigger fish. “I don’t propose to be anyone’s business partner, and we’re very clear about the fact that we’re here with a certain mission, and we’re not taking finders fee for matchmaking and things like that,” Lipman stressed. “If I’m able to help on an ad hoc basis, I’m happy to help.”

The benefits of an “options-for-charity” platform like Tmura are transferable across the the technology sector. And while fintech may be weaving charitable giving into everyday transactions, there is little information available regarding the state of CSR in the sector.

By attracting employees and customers, boosting employee morale and providing networking opportunities, CSR models have shown that they’re not just the right thing to do, they’re can be a good business model as well.

Photo credit: Photographing Travis via Visual hunt / CC BY

Inside CommonBond’s 401(k) platform for student loan debt

In July 2016, student loan platform CommonBond acquired online loan repayment advisor Gradible. The acquisition of Gradible, which uses an algorithm to recommend what the best repayment options are for student loan borrowers, has enabled CommonBond to roll out a new platform that it’s calling the 401(k) for student loans.

The 401(k) platform will enable employers to contribute to their employees student loans just as they contribute to their employees’ retirement. “What the acquisition of Gradible allows us to do is to marry up certain technologies that they’ve built with technologies that we’ve already built to accelerate the platform,” said David Klein, co-founder and CEO of CommonBond.

Gradible’s merger with CommonBond was two years in the works. A personal connection lead CommonBond to partner with the software company, becoming one of the refinance options Gradible offered on its platform. Eventually, CommonBond’s desire to expand its reach together with Gradible’s intention to accelerate its vision led to the merger.

However, the 401(k) platform is more than just an extension of CommonBond’s suite of refinancing products; it’s a new way of addressing the student loan debt ecosystem. The consumer has many different relationships in their lives with financial providers, and CommonBond has begun to recognize that there is a way for financial providers to play more roles in consumers’ financial lives.

“If you hold student debt, regardless of whether refinancing is right for you, regardless of whether we talk to you directly or go through your employer, we’re now enabling you as employee with student debt to pay off your debt faster because we’re enabling your employer to put some capital towards that principal payment,” explained Klein.

Perhaps as a sign of how the 401(k) for student loans is an idea whose time has come, Klein cites employers as the driver behind this new platform. CommonBond had kicked around this notion, but it was really the employers themselves that helped direct what the platform could look like and what it was capable of doing. Partners and prospective partners on the core refinance side of CommonBond’s business had begun to ask how they could contribute directly to their employees’ student loans. CommonBond was listening.

“We decided that this is something that’s going to be really important to employers,” said Klein. “It’s something that we can build, and it’s something that the acquisition of Gradible can accelerate.” CommonBond has already begun to market the 401(k) platform to companies around the country. Its target employers are those who employ a goodly amount of millennials (an astonishing 81% of whom have at least one form of long-term debt, including student loan debt) and employers who focus on recruiting and retaining top talent.

Klein believes that bringing Gradible in-house will enable CommonBond to reach and meaningfully impact every one of the over 40 million Americans saddled with student debt, and to a certain extent this is true. As a student loan reassessment tool, Gradible can help students discover alternative ways to manage their debt, such as income-based repayment and public service loan forgiveness.

But the 401(k) will ultimately serve the “top talent”, who are the most likely to make it out of student debt in the first place.

Still, early response to the platform has been positive. CommonBond had one company ask it to implement the platform for them, and Klein has also piloted the 401(k) at CommonBond itself – much to its employees’ delight. Each employee at CommonBond receives $1,200 a year to pay off student loans, though this employee perk comes at the expense of the traditional matching retirement contribution.

“We think about it in terms of staging,” Klein explained. “I can’t wait until we start matching our 401(k) contribution, but it’s not yet.”

While the CommonBond-Gradible marriage can’t fix what’s broke with the student loan industry at large, its 401(k) product is opening up the traditional closed lender-borrower relationship to employers. So far, this threesome has benefited the entire loan ecosystem: lenders are getting repaid faster, employees are happier, and employers are meaningfully participating in their employees’ financial lives.

Photo credit: COD Newsroom via Visual Hunt / CC BY

The Startups: Who’s shaking things up (Week ending January 10, 2016)

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 newsletter.[/alert]

The Startups: Who’s shaking things up

Income&’s Brad Walker on building a better mousetrap for retirement investing using marketplace lending (Tradestreaming)

trov’s Scott Walchek on designing the world’s first on-demand insurance for single items (Tradestreaming)

Startups raising/Investors investing

Student lender CommonBond raises $625m in total funding (CrowdfundInsider)

Alibaba’s Finance Arm Said to Seek at Least $1.5 Billion (Bloomberg)

Street Contxt scores $8m to bring more efficiency to investment research distribution (Business Insider)

Blockchain Startup Gem Closes $7.1m Series A to build a modular platform for blockchain applications (CoinDesk)

Canadian online lending marketplace Lendful raises $15m (Finextra)

Xfers Lands $2.5m To Simplify Bank Transfers For Online Sellers (TechCrunch)

LoanNow Secures $50m Credit Facility (Finovate)