News Briefing - Crowdfunding, SME And Alternative Finance

crowd in nightclub, seen from a DJ point of view

1.UK – P2P


A release on Zopa’s new funding round:


Zopa, a London, UK-based peer-to-peer lending platform, raised £44m in the first stage of its latest funding round.

The backers were not disclosed.

The company intends to use the funds to continue to launch a new set of products.

Created in 2005 by Jaidev Janardana, CEO, Zopa operates an online p2p lending platform that directly matches people looking for a personal loan with people looking to invest. Since 2005, the company has lent £3.5bn to UK consumers to finance their difference needs in terms such as debt consolidation, home improvements, car finance and weddings. It achieved full year profitability in 2017 for the first time since 2012.”

2. UK – P2P

P2P Finance News reports:


“RATESETTER has confirmed that investors will once again be able to set their own rates on capital reinvestments in its Rolling Market from next month.

The peer-to-peer lender implemented an overhaulof the popular Rolling Market product on 6 June, no longer allowing investors to set their own rate on reinvested money.

Under the changes, investors had to use a market rate which was based on supply and demand on the platform.

However, following a backlash from some investors, RateSetter announced plans to reverse the move.

In a blog post the firm said it will reactivate the function on 5 September, which will require an update to investor terms.

“As part of the upgrade, we chose, with simplicity in mind, to set capital repayments to reinvest at Market Rate,” said the RateSetter blog.”


3. US – P2P


LendingClub (NYSE:LC) is out with numbers for the second quarter of 2018 ending in June. According to a release, LendingClub delivered the following results:

  • Record net revenue of $177.0 million, up 27% year-over-year
  • Record originations of $2.8 billion, up 31% year-over-year
  • Improved Contribution Margin to 48.3% from 47.3% in the same quarter last year
  • Delivered Adjusted EBITDA of $25.7 million, or a 14.5% Adjusted EBITDA margin, up 11.3 percentage points year-over-year reflecting the company’s efforts to drive profitability
  • GAAP Consolidated Net Loss was $(60.8) million, or $(6.7) million excluding $35.6 million of goodwill impairment related to the Company’s patient and education finance unit, which reflects the Company’s focus on growing the direct to consumer marketplace and $18.5 million of expenses related to outstanding legacy issues disclosed by the Company in 2016
  • Basic and diluted EPS attributable to LendingClub was $(0.14) for the second quarter of 2018, compared to basic and diluted EPS attributable to LendingClub of $(0.06) in the same quarter last year and $(0.07) in the first quarter of 2018.Adjusted EPS was $0.03 for the second quarter of 2018, compared to adjusted EPS of $(0.01) in the same quarter last year and $0.01 in the first quarter of 2018.
  • LendingClub said it is using cash to accumulate loans for future transactions. Loans held for sale by the Company at the end of the second quarter of 2018 were $515.3 million, which were financed with $249.2 million of debt outstanding under the Company’s warehouse credit facilities.

    Shares of LendingClub rose after hours but prior to the conference call that should shed additional light on the marketplace lending platform’s operations.

4. International – FinTech


Boomstarter.Network, Eastern Europe’s largest service helping generate pre-orders for tech and business startups, this week introduced payments with cryptocurrencies, according to BanklessTimes.

Until now, leading global crowdfunding platforms have been offering only payments in traditional, centrally issued currencies
processed by third parties — banks or payment systems. This leads to delays, with entrepreneurs waiting on average weeks to receive the money and start fulfilling their obligations to the community of buyers.

Cryptocurrencies make it possible to eliminate total dependence of crowdfunding on centralized financial institutions.

Entrepreneurs on world’s busiest crowdfunding platforms now cannot quickly receive the funds they have already collected for
product development. Banks traditionally process such payments in a matter of a few days or weeks. As a result, the product roadmap is disrupted, the buyers are disappointed, and startups spend time, effort and money to compensate for the delay.


5. International – FinTech


Crowdfundinsider on a new financial standards body:


“The UK Financial Conduct Authority (FCA) has initiated a new consultation that is going beyond the UK borders when it comes to Fintech innovation. Announced yesterday, the FCA has created the Global Financial Innovation Network (GFIN). The multinational group includes regulatory agencies from the US, Singapore, Hong Kong, Australian, France and more.

The members as announced include:

  1. Abu Dhabi Global Market (ADGM),
  2. Autorité des marchés financiers (AMF)
  3. Australian Securities & Investments Commission (ASIC)
  4. Central Bank of Bahrain (CBB)
  5. Bureau of Consumer Financial Protection (BCFP, USA)
  6. Dubai Financial Services Authority (DFSA)
  7. Financial Conduct Authority (FCA, UK)
  8. Guernsey Financial Services Commission (GFSC)
  9. Hong Kong Monetary Authority (HKMA)
  10. Monetary Authority of Singapore (MAS)
  11. Ontario Securities Commission (OSC, Canada)
  12. Consultative Group to Assist the Poor (CGAP)

    As described by the FCA, GFIN will seek to provide “a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for co-operation between financial services regulators on innovation-related topics, sharing different experiences and approaches.”

 6. International – FinTech

“A Japanese bank that allegedly allowed notorious failing cryptocurrency exchange Mt Gox to continue accepting deposits while simultaneously freezing withdrawals is once again appealing a ruling that allowed a class action suit to proceed against the bank in the US, Finance Feeds reports.

The bank, Mizuho, has sought dismissal of a US-based Mt Gox class action suit before. According to Reuters, in March 2016, a judge in Chicago ruled that a Mt Gox class action suit alleging negligence at Mizuho could proceed under US jurisdiction on behalf of US plaintiffs.

The Japanese bank reportedly admitted to having served Mt Gox customers in 175 countries, including 30 000 customers in the US.

Both the Chicago case and the current California-based case are being handled on behalf of plaintiffs by the American Law Firm Edelson PC.

In the lead up to the Chicago ruling, Mizuho bank argued that the case belonged in Japanese courts. But U.S. District Judge Gary Feinerman ruled that trying the case in the US would comprise no more hardship on the bank than what is, “routinely tolerated by courts.”

The case at issue now concerns plantiff Joseph Lack and lawyers from the Edelson law firm’s San Francisco office.

According to Finance Feeds, Lack claims that in January 2014, he wired $40 000 to Mizuho Bank for transfer to his Mt Gox account. The bank collected the transfer fee, says Lack, but the money never materialized in his Mt Gox trading account.

By February 24th of that year, Mt Gox had failed completely, and Lack’s money hasn’t been seen since.

Complainants in the Chicago case said, according to Reuters, that Mizuho “inflated” their losses by continuing to process deposits to Mt Gox while limiting withdrawals from Mt Gox as the exchange began to fall apart.

The Chicago plaintiffs also alleged that Mizuho, “stood silent while allowing the public to continue being duped,” by claims made by Mt Gox that withdrawal issues were being caused by technical problems and not by insolvency issues caused by a massive hack and theft of bitcoins.

In the California case, according to Finance Feeds, Lack claims that Mizuho, “had a duty to disclose material information to him and the other depositors…(and) intentionally defrauded him by concealing that the bank was no longer accepting withdrawal requests.”