Inside Bond Street’s content marketing strategy

High interest rates and a downmarket reputation don’t usually make for good marketing. But online lender Bond Street is trying to turn that messaging around with a content marketing strategy that focuses more on user experience than the nitty gritty.

“That’s really helped us organically build a reputation within certain industry categories and geographies,” said Michael Jones, director of community development at Bond Street. “We’ve concentrated our efforts towards initiatives in which we can serve as both an advocate and resources to small businesses.”

Jones said the company is “passionate about building a brand,” which it does by creating editorial content. It has a blog that profiles business owners Bond Street serves across the country, like the guys behind the Two Hands cafes and restaurants or the women that launched Sky Ting Yoga in New York City; and an online magazine that looks at the cultural and economic impact of independent businesses in New York (celebrity restaurateur Daniel Boulud and artist Baron von Fancy are among many interviews that address the importance of supporting local businesses). It also has a podcast called the Nitty Gritty that features the entrepreneurs behind brands like Sweetgreen, charity:water, McNally Jackson and Smitten Ice Cream; and a series of city-specific resources for female entrepreneurs.

Jones declined to share Bond Street’s annual content marketing budget, but said the company has two dedicated employees working on content marketing, out of about 40 total employees.

Many small business lenders strive to build a community by creating products and services to help people beyond just a transaction, said Ian Benton, an analyst in Javelin Strategy’s small business practice. And it’s not just the nonbank lenders. Banks are just as focused on the customer relationship, which was once built and developed in person around a transaction. Technology has widened the gap between the borrower and the lender so much so that the lending industry is almost entirely commoditized and shopping for lenders is easy.

“Customers don’t need to have the previous relationship, so banks and fintech providers are looking for reasons to strengthen those customer relationships,” he said.

Marketing has become expensive for online lenders because of the high cost of customer acquisition. Partnerships are an easy way to bring that cost down, Benton said. To date, Bond Street has partnered with WeWork to offer loans to member companies of the co-working space company; SMB-focused software companies like Booker and Front Desk to offer their clients discounted loans; and most recently, with NerdWallet, the comparison shopping site for credit cards and other financial services, to help provide small business owners with financing options.

“The opportunity for lending is not just to take advantage of the gap in capital available to small businesses, but rather to become their financial partner, and improve an antiquated process that is more than ripe for change,” Jones said.

Bond Street is just one example of online lenders and other financial startups that market heavily around the idea of speed, ease and the idea that it can get small businesses the money they need and get it to them fast. Transparency has become a significant theme for them too, one that has helped them move away from “risky” borrowers.

Last week the Federal Reserve Bank of New York issued a report that found small businesses taking out loans with online lenders showed higher levels of dissatisfaction than those borrowing from traditional banking institutions. Most borrowers cited lack of transparency as a major cause of their dissatisfaction, but borrowers of online lenders also cited higher interest rates and unfavorable repayment terms.

Online lenders’ APRs can get as high as a 44 percent compared to what a bank might charge – which looks more like seven percent, typically – and can get into the triple digits when businesses decide to renew their loans, according to Evan Singer, CEO of SmartBiz Loans, an online platform that connects small businesses with banks for Small Business Administration loans. This is often what causes confusion about transparency. At Bond Street annual interest rates start at six percent, though most customers will see rates between eight percent and 16 percent. Jones said the company always communicates its APR and interest rates to customers and that there’s no prepayment penalty with its product.

“In the broker ecosystem, there’s this large network of ISOs that charge incredibly high rates, and also aren’t totally transparent about what they’re offering to their customers,” Jones said. “We made the decision early on that we didn’t want to work with people who would compromise the customer experience.”

Transparency remains a sticking point for online lenders

Transparency is the big sticking point when it comes to why small businesses still prefer banks to online lenders.

A small business credit survey by the Federal Reserve Bank of New York found 46 percent customer satisfaction at online lenders like Lending Club and OnDeck Capital with a 19 percent rate of dissatisfied customers – compared with large banks’ 61 percent of customers who indicated they were satisfied with their small business loan process and 15 percent of whom expressed dissatisfaction. Almost half of all customers specified that their dissatisfaction came from a “lack of transparency.”

Rohit Arora, CEO of Biz2Credit, an online small business platform that matches entrepreneurs with credit solutions, said online lending solutions can be a little misleading. They’re good solutions for customers whose expectations have been raised by expediency of the digitized commerce sector, but the reality is that banks’ core functions are still in the dark ages, he said.

“Large banks and small banks still haven’t gone online,” Arora said. “You can’t go and get $200,000 from your bank – that can take you four to six weeks. In other sectors, convenience and price go in tandem, in financial services, convenience comes at a cost. That’s when the higher dissatisfaction level comes into the picture.”

Jeremy Ruch, Bond Street head of business advisory, said that transparency around pricing and profits is generally the sticking point. Customers of other alternative lending products aren’t perfectly clear on what the requirements of their loan products are, how they qualify or why they don’t or what exactly they’re paying for, he said, although he maintained that Bond Street receives mostly positive feedback about the transparency of its loan process.

“Transparency is obviously incredibly important to us,” he said. “It’s for that reason that we make a point of actually highlighting the interest rate to our customers before they sign up. It’s about being completely open about all elements of our process and clear about what they’re signing up for before they do it.”

Online lending customers are also dissatisfied with higher interest rates and unfavorable repayment terms, two common issues for the growing industry, which continues to have a higher cost of capital and for customer acquisitions.

Those issues are also what’s driving bank-fintech partnerships like the agreement between On Deck Capital and JPMorgan Chase, which is trying to grow its small business loans aggressively. Plus, online lenders target riskier businesses that probably couldn’t get credit from a bank.

Arora said a big challenge for online lenders is simply that they haven’t spent the time or money to build comparison-type dashboards that would help customers understand exactly what they’re getting.

“A lot of online lenders are failing. They’re catering to a larger proportion of customers now compared to banks – not in terms of dollar value but in terms of units. And customers need more education, you have to explain to them why you’re charging a higher rate.”

Can better products and lending practices heal marketplace lending’s hangover?

The tide is waning for marketplace lending. As Warren Buffet once said, we are now about to see who has been swimming naked.  However, contrary to panicked media reports, the industry is not in danger. It is just dealing with a hangover.

Marketplace lenders experienced incredible growth since 2010, with annual origination volumes on Lending Club and Prosper – the 2 largest marketplace lenders — rising from $153 million in 2010 to over $12 billion in 2015.

In 2016, the trend reversed. For Lending Club, total originations for Q2 2016 came in at $1.96 billion, down from a peak of $2.75 billion in Q1. In 2Q15, Prosper reported a steep decline of over 50% in originations compared to same period a year before.

Marketplace lenders are trying to explain the change. “The decreases above are the result of a number of our largest investors that have paused or significantly reduced their purchases of whole loans through Prosper’s marketplace,” the company stated in its recent quarterly report. It promised to take steps to increase available capital by increasing the interest rates on loans, launching a new line of asset management products and improving the retail investor experience.

The hype can be clearly seen in PwC’s DeNovo quarterly report, which tracks fintech trends. Marketplace lending was the top trend for the first three quarters in 2015, but dropped to the second-largest trend in 4Q15. In 1Q16, the industry did not even make the top 10.

“Back in late 2015 everyone was getting into the space, and there was too much optimism” said James Wu, founder and CEO of Monja, a marketplace lending analytics company. Now, he adds, smarter investors are looking at data more carefully and can generate better returns. “From our own analysis, we see some of the returns for platforms are better than they have been in the last 24 months. 2015 was a great year for platforms, but from an investment perspective, the returns were low.”

According to Wu, an excess of funding in 2015 caused marketplace lenders to desperately look to expand their borrower base, venturing into lower tiers of credit, pushed by aggressive marketing techniques like direct mailing.

The repercussions of such action are now visible with a rise in delinquencies and a damning report from Moody’s questioning the viability of the asset class. “Investor overreacted to that news,” said Wu, adding that the 2015 vintages are hurting current performance, overshadowing newer and better vintages that will generate long term growth and returns for investors.

Though each platform comes with a built in set of analytics tools that allow investors to select loans according to their risk appetite, third party analytics companies, such as Monja or Orchard, can give investors the ability to work across multiple platforms and provide deeper insight into the sources of excess returns. Such strategies are of course harder than dumping money into all platforms as some investors did a year ago.

Unlike other sources of capital, securitizations of marketplace loans are trending upwards, topping $1.7 billion according to PeerIQ, and will probably become a more substantial source of capital for marketplace lenders. This, however, is a far cry from marketplace lending’s P2P origins.

Marketplace lenders are at a crossroads. The resulting shakeout, however, might prove to be beneficial to the market.

“Investors are getting more realistic about returns, and platforms are getting more realistic about what they can get away with. They need to come back and offer products that are compelling for investors,” Wu concluded.

Moody’s: US online lending market plagued by weakness

Moody’s offered a harsh analysis of the current viability of marketplace lenders. In a report published October 19, the ratings company said that the competitive advantages of online lending are predicated on an unsteady foundation of confidence-sensitive funding, low recurring revenue, and high marketing budgets.

“Online lenders have yet to achieve adequate profitability, and rapid growth exacerbates the volatility of their performance,” Warren Kornfeld, a Moody’s senior vice president said.

According to the report, many of the online lenders have a high proportion of non-recurring, gain-on-sale or fee income generated from selling newly-originated loans.

Marketplace lenders in the US accounted for loan originations worth approximately $23 billion in 2015, according to Deloitte. LendingClub, the largest marketplace lender in the US, originated $8.4 billion of loans in 2015.

Lending Club has been under fire this year when then-CEO Renaud Laplanche was found to be in possession of undisclosed pools of capital to fund loans on his firm’s platform. The scandal was seen to be indicative of the capital crunch marketplace lenders are facing. They’re having a harder time attracting money from hedge funds and are continually looking for new capital sources through securitizing loans or investments from marketplace lending-focused mutual funds.

On the borrower side as well, marketplace lenders are having a tough time. In a recent SEC filing, Lending Club stated it “continued to observe higher delinquencies in populations characterized by high indebtedness, an increased propensity to accumulate debt, and lower credit scores.” The lender states the trends are more notable in higher risk grades, which account for approximately 12 percent of platform volume. In response, Lending Club increased interest rates and tightened credit policies.

Marketplace lender CircleBack also announced this week that it will stop making new loans.

Increased delinquencies and defaults might dissuade banks from buying up the loans or discourage retail investors from using the platform.

Moody’s notes that some online lenders have spent as much as 55 percent of revenue on sales and marketing, with payoff still uncertain.

Ironically, incumbents might beat the disruptors at their own game. Not impaired by funding constraints, banks can offer user friendly, online loan origination. Goldman Sachs did exactly that with the this week’s launch of Marcus, its online-only consumer lending platform.

With new mutual funds, marketplace lenders continue to seek diversified sources of capital

Marketplace lending is getting somewhat of a bad rap recently. Just last week, the Consumer Financial Protection Bureau slapped LendUp, with a $1.8 million civil penalty and ordered the company to provide more than 50,000 consumers with approximately $1.83 million in refunds. Earlier this year, the Lending Club scandal, which caught the CEO creating undisclosed sources of capital, sent pundits into a frenzy about the fate of marketplace lending.

The scandal was indicative of the capital crunch happening to marketplace lenders. As hedge fund pools dried up, new sources of capital are emerging. The first two marketplace lending mutual funds, sponsored by Stone Ridge Asset Management and RiverNorth Capital Management, were approved recently in the U.S. by the S.E.C., with similar funds launched earlier in the U.K.

“This is an exciting opportunity for RiverNorth and our investors,” said Philip Bartow, co-portfolio manager of the RiverNorth fund. “The benefit of being early to the retail market will give us the enhanced ability to purchase loans directly from quality online lending partners with whom RiverNorth has negotiated loan acquisition and servicing relationships.”

More funds have filed to become ’40 Act funds for marketplace lending and are awaiting S.E.C. approval.

The marketplace lending funds were designed as interval funds, which means that investors can invest money into the fund at any time. Redemptions, however, are restricted to certain time periods and certain amounts. Both U.S. funds only allow redemption on a quarterly basis.

Though anyone can invest directly on the marketplace lending platforms, they are cumbersome compared to mutual funds, a product investors and advisors know how to manage. In order to invest in marketplace lending, one needs to open a new account and learn a new set of analytical tools to aggregate and select loans that fit his risk preferences. If an investor wants to invest in more than one platform, this problem might become prohibitive.

Alternatively, hedge funds, which comprise a big chunk of the capital in marketplace lending, are only open to accredited investors. Launching these mutual funds will give retail investors easier access to consumer debt.

“By expanding marketplace loans to a broader investor base, these new funds will transform the industry and could eventually move today’s platforms towards principal broker-dealer markets, similar to other fixed income instruments,” Monja, a marketplace lending analytics solution, explained in a blog post.

To access other sources of capital, marketplace lenders have also begun securitizing their loans.

According to PeerIQ, Q2 2016 marketplace lending securitization volume topped $1.7 billion, up 14.8 percent from Q1. Also that quarter, SoFi issued its first rated unsecured consumer loan deal and received an industry first ever AAA rating from Moody’s on its recent student loan transaction.

The growth in Q2  brings the total size of marketplace lending securitization issuance volume to date to $10.3 billion.


The upswing in marketplace lending securitization comes against a backdrop of an uptick in collateralized loan obligations of all sorts. According to the Financial Times, banks project $50-$60 billion in CLOs sold by end of year in a ‘frenzy of issuance’.

Citi, Morgan Stanley, and Credit Suisse are leading in marketplace lending securitization deals. The top five bookrunners captured 75 percent market share, or 34 of 41 deals. Earlier this year, Citi  suspended an agreement to securitize Proper’s loans, but that did not affect general trends.

As these products establish a track record for performance, demand for them is expected to grow as well.

Everywhere you look, problems for marketplace lending

monetizing financial media

Just when it seems like things can’t get worse for the marketplace lenders, well, they can. Reuters highlights a growing problem: Many online lenders have failed to detect the “stacking” of multiple loans by borrowers who slip through their automated credit processes and end up applying for multiple loans.

Bill Kassul, a partner in Ranger Capital Group – which has about $300 million invested in marketplace lending and business lending – told Reuters that stacking has become a concern in the last two years and poses a “big risk” to investors.

Never fear, though, there are some simple fixes can keep the stackers out, but current practices don’t seem to instill confidence (at least, optically). Timothy Li, CEO of MaxDecisions, helped build out the underwriting practices at some of today’s top online lenders. He thinks there are some definitive behaviors that lenders can pick up on to prevent stacking.

“Real time detection of bursts of applications being filed across lead generators to name one,” he said. “These bursts are tell tale signs of a customer or a publisher taking out or presenting multiple offers to the consumer.”

Many of the problems that drove the news cycle around Lending Club and Prosper in the last few weeks, experts tell us, can be seen within the context of how the marketplace lending industry has evolved from single end-to-end service platforms to a networked ecosystem.

“We are 100% confident that this networked ecosystem will replace the incumbent vertically integrated bank model, even if we cannot see exactly which ventures will thrive and in what timeframe,” wrote Bernard Lunn.

Lending across the pond

Aside from a massive ponzi scheme, it looks like things are holding up better in Asia. China isn’t only dominant in online lending, it’s also the biggest market for fintech – the world just doesn’t know it yet. Chinese companies, ranked by market cap, dominate fintech with 4 of the top 5 fintech companies in the world. The largest company, Alibaba’s Ant Finance, recently closed the world’s largest private funding round for an Internet company at $4.5 billion.

Who needs FICO when you’ve got nude selfies?

Some alternative lenders are taking non-FICO credit scoring to a whole new level. Some Chinese online lenders accept nude photos as collateral. Think about it — it’s an ingenious idea. An online lender convinces (desperate) borrowers that they can secure a line of credit by sending in a revealing photo. Pay back your loan, and, well, we’ll just make that photo disappear (seriously??).

If you don’t pay back your loan, we’ll just post that naked selfie you sent us to the social webs for your friends, families, and colleagues to ogle.

Just wow…but I bet you pay back that loan.

Por Favor, how do you say “Marketplace Lending” in Spanish?

In a world in which US marketplace lending giants Lending Club (aka “we have an award-winning sailing team”) and Prosper (aka “we don’t”) get the go-ahead from the US Treasury Department to allow non-US citizens and permanent residents to become investors and borrowers in their respective platforms, what’s the first thing that LendingClub and Prosper execs do?

Probably party, hard. After that, they might start looking into currency conversion solutions, researching how this potential demographic shift will affect taxation policies, and even consider doing A/B testing to optimize landing page models for different geographies (they should probably be doing this anyway).

One thing that might slip under the radar is language barriers. Sure, LendingClub and Prosper will realize that some translation will have to transpire if they want to lure people away from the marketplaces in their home countries. Nevertheless, there’s a good chance that cross-border communication might not be these companies’ most pressing concern. After all, marketplace lending worships at the altar of numbers – not words.

The communication opportunity

However, if LendingClub and Prosper want to successfully market their respective religions, they’re going to have to invest more in multilingual infrastructures. It turns out that international miscommunication is costing businesses money, big time.

A 2012 study conducted by the Economist Intelligence Unit (EIU) surveyed 572 business executives from around the globe and found that bungled international communication had serious implications for business: over half of the respondents claimed that “ineffective communication or inadequate collaboration had obstructed major international transactions, inevitably resulting in financial loss.”

Two-thirds of the respondents felt that language and cultural differences made it difficult to gain a foothold in foreign markets in the first place.

From a consumer perspective, a 2008 Canadian study found that website usability increases when it was originally conceived in the native language of the user, not merely translated. Good old-fashioned translation, no matter how outstanding it is, doesn’t guarantee user understanding; it is only “a culturally adapted website [that] results in greater ease of navigation and a more positive attitude towards the site”.

Look to incumbents

The language challenges that LendingClub and Prosper will face are ultimately the same challenges that global financial institutions have been facing for years. Dave Robertson, managing director at financial consulting firm Novantas, sees the the finance industry coping with language difficulties through the multiple communication platforms they use to message their clients. Similarly, giving customers a seamless digital experience is also a challenge when you begin to tie in customer service professionals with native language capabilities.

Internal knowledge management programs are also susceptible to language vagaries. “Applying knowledge management structures to complex financial processing is difficult enough in one language,” Robertson explained. “Pulling this off in many languages is extremely hard. Then, on top of that, to understand product usability, mining this information across multiple languages is VERY hard.”

In an email to Tradestreaming, Robertson gives a stamp of approval to certain banks’ cross-border communication efforts. Citi, for example, has developed a robust infrastructure for local internal communications within a larger English-language system, while Bank of America receives top points for successfully marrying knowledge management systems to multiple languages. Ultimately, though, these language problems are pervasive, and should not be written off as unimportant or inconsequential.

Marketplace lenders in multilingual countries should really be leading the charge … but aren’t.

Marketplace lenders based in multilingual countries could have been a perfect case study for how marketplace lending gets multilingual right. Unfortunately, marketplace lending in multilingual countries such as Canada or China (fun fact: home of 297 thriving languages) is conducted in one language: in Canada, Lending Loop for SMBs is in English, and in China, (aka “we just raised $485 million in Series A funding”) is in Simplified Chinese, a written form of Mandarin. While it would be ridiculous to expect to have 297 versions of their platform, you could imagine Lending Loop having seamlessly integrated French into their system, in the off-chance that people in Quebec need help getting their small or medium business off the ground.

It doesn’t seem like the French version of Lending Loop will be a priority anytime soon, though – the only Canadian marketplace lender has had to put their P2P activities on hold while they work out whether they’re in compliance with Canadian regulation.

Marketplaces can go far, linguistically speaking

Marketplace lenders hold the upper hand over incumbents when it comes to tackling language barriers – marketplace lenders are new to the financial scene, which means they have less entrenched legacy systems and ingrained business practices to prevent them from going after multilingual platforms. Because they typically excel in technology, marketplace lenders are also better equipped to partner with other tech providers – think emerging translationtech – to solve cross-border miscommunications.

The internet has been a major catalyst for globalization, and it would be naive to imagine that marketplace lenders will forever be content to remain in their local marketplaces. At some point, regional regulations will catch up with globalization trends. Until that point, marketplace lenders can start to talk about how multilingual financial systems work and how they can be done better – after all, isn’t language the original P2P?

Photo credit: shirokazan via Visual Hunt / CC BY

High Five! The top 5 fintech stories we’re following today

5 trends we're tracking in finance

[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s newsletters .[/alert]

1. How Wells Fargo launched online loans in 9 months
It took Schwab 6 months to launch its entry into roboadvisory, the Schwab Intelligent Portfolios. It did it by pulling together a multi-functional team from across the company, getting people excited about the project by positioning it as the future of the firm. It was a great demonstration how an incumbent financial institution can counter what’s going on in fintech startup land with its own form of innovation.

Now, here’s how Wells Fargo launched its own online lending product using similar tactics. It took Wells Fargo 9 months to launch its own online lending product. Here’s how the firm went from zero to everything to create a competitive offering.

2. Walmart Pay and the overcrowding of the mobile payment market
With the success of the Starbucks app (21 percent of all its transactions — some 16 million consumers use the app), many retailers are busy working on their own form of payments. Walmart, certainly, showed interest as a big driver behind an industry consortium (MCX) that intended to do an end-around of the credit card companies.

So, people were genuinely surprised when Walmart launched its own payment app through 600 of its stores. Are we entering an era where every retailer will have its own payment app? Maybe but Tradestreaming’s Hadas Tayeb breaks down what’s happening in retail payments land and what that may mean for the consumer.

3. Alibaba now 3rd largest money market fund in the world

It took less than a month for Chinese ecommerce leader, Alibaba’s money market fund to grow larger than the average US fund. Now, after a year, it’s grown so much that it would rival the 3rd largest US MM fund. The power of a big tech firm moving laterally into financial services is transformative – that’s why the biggest competition to some core banking functionality and services will come from the Apples, Googles, and Amazons (and, yeah, Alibabas).

4. Tradestreaming’s list of top resources about the marketplace lending industry

So much has happened over the past couple of months in marketplace lending. From massive changes in the supply/demand equation to the ouster of Lending Club’s CEO, it’s hard to stay on top of it all. It’s an industry that’s dealing with its own growth pains and there are some really good resources out there to help investors, borrowers, and industry professionals make sense out of it all. We’ve assembled them into one easy-to-use list. Go get ’em, Tiger.

5. Why fintech influencers don’t pay to play

Funny thing happened this week in fintech land. Here’s the brief summary of what went down:

  1. Create a list of the top 100 fintech influencers
  2. Share it
  3. Ask the influencers to pay for inclusion
  4. Tweetstorm ensues

So, here’s a word of advice — don’t publish a list of fintech influencers of any kind and then ask the people on the list to pay for their listing. It doesn’t look good, is kind of a shady practice, and will probably be shared with an audience of hundreds of thousands of industry professionals.

Tradestreaming’s list of top resources about the marketplace lending industry

top marketplace lending resources

Marketplace lending is certainly a growing industry. No industry grows in a straight line and marketplace lending is enduring — and will endure — its own growth challenges as it matures as an industry. There are some great resources out there for observers, analysts, investors, employees and just anyone really with an interest in the marketplace lending industry to dig deeper and learn more.

We’ve assembled a list of some of the best marketplace lending resources around, many of which we use ourselves in Tradestreaming’s cover of the space.

Marketplace Lending Data

LendingClub’s own data: If you want to go to the source, start with Lending Club’s statistics. At a high level, the largest marketplace lender tracks its own trends in aggregate at the platform level both quarterly and yearly. If you want to go deeper, the marketplace lender makes its historical returns by investment grade information available. For the power user, directly download complete loan data for all loans issued through a particular time period, including the current loan status (Current, Late, Fully Paid, etc.) and latest payment information.

MonJa: Monja provides market insights for marketplace lending through some analytics tools the firm has developed. It also publishes monthly trend updates on its blog, teasing out important information like underwriting and delinquency trends. The blog discussion is a good mix of charts and the written word. Monja also produces its own marketplace lending indexes based on total returns.

Orchard Platform’s Blog: Orchard is a venture capital-backed technology solution for investors and originators in the marketplace lending industry. Given the firm’s position in the marketplace lending ecosystem, it has a data-level view of much of the fund flows at any moment in time. Orchard publishes trends and insights periodically on its own blog, both in article and report format.

Marketplace Lending Publishers, Blogs, Commentary

The Financial Times’ Kadhim Shubber has had his finger on the pulse of marketplace lending (and on fintech, in general). He publishes his reporting on the FT’s Alphaville section, which requires a free registration. It’s worth it to access Shubber’s coverage of the marketplace lending space.

Lend Academy: Peter Renton was an early influencer in the marketplace lending industry (back then, we all called it peer to peer lending). He was buying loans on both Prosper and LendingClub and writing about his experiences and performance. Lend Academy grew out of that perspective, albeit now with more tools and broader industry coverage. Peter is a co-owner of the LendIt conference (see below), the reigning heavyweight champ of marketplace lending conferences.

debanked: debanked began its life as the Merchant Processing Resource before rebranding to its current state in 2014. That’s because founder, Sean Murray has deep experience in the merchant cash advance industry. Given Sean’s perspective, debanked’s daily coverage includes a more technical, industry-insider approach to online lending. There’s also a print magazine and a forum, if that’s your thing.

Fintech Junkie: The Fintech Junkie blog is authored by Frank Rotman, a 20+ year veteran of the fintech industry. Frank is a founding partner of QED Investors, an early-stage investment firm focused on fintech. The QED portfolio includes leading fintech startups like Prosper, Credit Karma, and SoFi. Frank’s professional background at Capital One and his investment experience in the marketplace lending industry make him definitely worth reading.

Marketplace Lending Cross-Platform Roboadvisors

Lending Robot: An investor can use LendingRobot to monitor the overall “health” of a portfolio, including current returns, forward looking returns, and average times to loan maturity of marketplace loans across platforms. The investing tools can also assist with deploying capital: for example, users can build rules governing an investment strategy using LendingRobot. Using varying-levels of sophistication, roboadvisors like Lending Robot can automatically invest and manage marketplace lending portfolios drawing from both primary and secondary markets.

Nickel Steamroller: Nickel Steamroller’s roots are in marketplace lending data. The site began by offering analytical tools to dissect loan data coming out of the big two marketplace lenders, LendingClub and Prosper. You can still find some of these tools on the site but NS has morphed into a full-fledged roboadvisors, providing investors automated tools to deploy capital and manage portfolios of marketplace loans on multiple lending platforms.

Marketplace Lending Events

LendIt: LendIt was one of the first marketplace industry conferences (at the time, the industry was called P2P) and launched in 2013 with a yearly summit in NYC. The first event was successful and the next year, the event moved to San Francisco and tripled in size. Now the company hosts marketplace lending events in the US, Europe, and China. Lend Academy’s Peter Renton (mentioned above) was one of the co-founders behind this event.

AltFi: This UK-based company was founded in 2013 by two veterans of the investment industry. The company runs 2 yearly summits on the alternative finance sector. The AltFi site also provides daily news and data on the alternative investing industry, which includes some coverage of the marketplace lending industry.

Marketplace Lending Presentations

4 essential presentations worth saving on the marketplace lending industry: Every industry has its own seminal reports, presentations, or slideshares that helped formalize the big ideas percolating around the experts, professionals, analysts, and investors. Marketplace Lending is no different — it has its own important presentations that many in the industry turn to for inspiration, market sizing, or just to use for their own presentations on the subject.

5 surprising things you probably didn’t know about LendingClub

Surprising things about LendingClub

Investors were left licking their wounds as LendingClub dropped like a rock boulder last week. That’s when news got out that the firm’s CEO was leaving. The company explained away Renaud Laplanche’s departure with 2 reasons: 1) a mispricing/mislableing of a series of loans sold to Jeffries and 2) an undisclosed equity position in a fund buying LendingClub loans after LendingClub itself invested in said fund.

Last week, we described and summarized much of the fuss going on at LendingClub. As the public is internalizing the news, the media is left trying to really understand what happened.

Here are some surprising things about LendingClub that are worth noting:

lending club loan drones
via Crowdfund Insider

1) LendingClub was testing loan drones – seriously? The company was rumored to be testing a loan drone — an unmanned aerial vehicle. The idea was that a remote-controlled vehicle like this could deliver wads of cash to borrowers directly to their homes within minutes or hours after being approved for a loan. Seriously?! Well, the firm’s (now ex-) CEO displayed a panache for this type of spectacle when he helicoptered in cash on attendees using a similar device at the Lendit Conference last year.

2) Jim Chanos, who called Enron, was short the stock: Jim Chanos, who predicted energy trader Enron’s collapse, just happened to be short LendingClub stock when it cratered. When interviewed why he was betting against the company, Chanos famously said, “We had problems with the model.” With the stock down close to 50% in just the last 30 days, we’re left wondering whether Chanos has closed out his trade or if he continues to see further downside to the shares.

3) Did an investor rat LendingClub out to the Department of Justice? The firm received a DoJ grand jury subpoena on May 9th, according to the company’s earnings report, the same day that the company announced the resignation of its CEO. Sean Murray found this to be funny timing because essentially, in spite of the best explanations the company gave regarding Laplanche’s exit, there still doesn’t seem to be a smoking gun. He conjectures that the triggering of the legal interest in LendingClub could have come from an investor (in this case, Jeffries itself) that tipped off the Department of Justice.

4) What’s LendingClub going to do now, buy back shares? The leading marketplace lender has been through a lot. With its back up against the wall, Gillian Tan analyzes the firm’s best options. While there may be some suitors out there looking to acquire the leading player in marketplace lending, she doesn’t think that will happen just yet. Instead, expect the firm to put to use the $600+ million it has in the bank to buy back its shares at currently distressed prices.

Even if the company decides that going alone isn’t its optimal strategy, a buyback may make sense. “Such a move would further reduce the number of LendingClub shares on issue, meaning that if the board decided a sale was the best option for the company, potential suitors would be compelled into paying a higher premium for its equity, ” she wrote.

5) Lending Club’s sailboat racing program set records
Lending Club’s second boat (there are 2?!), a 105 foot trimaran named Lending Club 2, broke a world speed sailing record in 2015 when it sailed across the English Channel from Cowes to Dinar. It took Renaud Laplanche’s crew 5 hours and 15 minutes, traveling at an average speed of 26.36 knots, to complete the race, beating the previous record of 5 hours 23 minutes rather handily. The team apparently beat another record, traveling from Newport to Bermuda in 23 hours and 9 minutes. It’s possible Laplanche picked up his penchant for sailing when he sold his last company to Larry Ellison’s Oracle — famous for their racing exploits.

Perhaps if the company ran as tight a crew on shore as it does on the water, it would still be smooth sailing for the leading marketplace lender.

Image from LendingClub