News Briefing - Crowdfunding, SME And Alternative Finance

Abstract representation of the stock exchange: bulls, bears and numbers on screens

1. UK - Equity / P2P Lending

The Funding Circle IPO happened, and we're reading contrasting reports of it.

Reuters called it 'lacklustre', and suggested that the eventual price struck indicated there was not as much demand for the shares as had been talked up in recent weeks, and this may be bad news for large listings in general, not only financial technology firms.

CNBC noted that the pricing was at the bottom end of the pence-per-share price range set originally by the company and its advisers, but was more optimistic:

"Funding Circle's flotation is a boost to the London Stock Exchange, which has been looking to attract large technology firms for whom New York is often more enticing because of its track record of technology floats."

TechCrunch, which is normally bullish about tech startups called it a "a positive, if not stratospheric, debut."

"The IPO train has been moving swiftly through the world of tech this year, but not everyone gets to ride in first class. In that context, Funding Circle’s conservative pricing and performance might be due to a few reasons..." which it then described in detail.

If everybody believed the same thing, we wouldn't have a market, would we?

Funding Circle IPO covered on Reuters

Funding Circle IPO covered on TechCrunch

Funding Circle IPO covered on CNBC

2. UK - Equity

Boutique hotel travel firm Mr and Mrs Smith raised £3.8m in a week, and the founders are, understandably, in a good mood. 

Tamara Lohan, co-founder of Mr & Mrs Smith, told firms at the Inspiring Speakers events, that crowdfunding forms a continued link between consumers and businesses.

She told The Herald: "It has been a critical part of the investment process.

"We crowdfunded with a bond in 2012 and one of the reasons was that we saw the Hotel Chocolat bond go ahead and their customers took their interest in chocolate, so when we did our bond we offered 7.5 per cent back if you took your interest in cash but 9% of you took it in holiday money, and 40% of the people who invested in that bond took it in holiday money.

"It engages the investors. They don’t just put money in and that's it, they become part of your story."

Read all about Mr & Mrs Smith in HeraldScotland


So - you've got a portfolio of young companies, protected by that tax wrapper the Seed Enterprise Investment Scheme. What returns can you expect to get on it?

 iExpats investigates SEIS performance.

4. UK - Advisory

The FCA's has a new register of financial advisers, designed to help retail investors choose someone in the neighbourhood. A contributor to FTAdviser thinks it reminders her of the dating app Tinder. (we don't think this is not a compliment.) 

Why the FCA's register is like Tinder.

5. UK - Fintech

The global law firm Simmons and Simmons announced the third annual cohort of the firm’s FinTech Fund at an event in London yesterday. The way the fund works is that the firm allocates £100,000 to help four FinTech businesses through the provision of free legal advice.

"2018 looks likely to prove a milestone year for the UK FinTech sector”, said Angus McLean, partner at Simmons & Simmons and head of the firm’s international FinTech team. “The Financial Conduct Authority’s consultation on the loan-based crowdfunding regime, following the publication of its long-awaited post-implementation review of the UK’s crowdfunding regulations, will have a material effect on the direction of the peer-to-peer industry in the UK. The UK authorities also look poised to intervene in the crypto-asset sector for the first time, with new regulations in that area looking highly likely. Challenger banks and FinTechs focusing on the SME market are also vying for a share of the £775million fund that is now available as a result of the European Commission’s recent approval of the Royal Bank of Scotland’s ‘Alternative Remedies Package’. The appetite of the public markets for the UK FinTech sector is also being tested in earnest for the first time.”

This year's chosen firms are Marshmallowa car insurer that targets the niche market of international drivers, who often over-pay;Axyon which brings AI solutions to finance; EdAid, which aims to offer students from low-income backgrounds to access education on a ‘study now, pay later’ basis with interest free loans, and Nimbla: ,which offers 'micro-insurance' products.

More details on the Simmons and Simmons website.

Coverage of Simmons and Simmons' FinTech Fund in The Global Legal Post.

6. US - Regulatory

The billionaire entrepreneur and investor Elon Musk is in trouble with the Securities and Exchange Commission (SEC), which has filed a lawsuit accusing him of securities fraud, and may result in him being banned from running companies in the future.

If you're interested in the details of the legal position, follow the links below, but our short summary is:  don't do stupid things on social media.

The complaint against Musk alleges that he released price sensitive information on Twitter. He offered to take  his company Tesla (NASDAQ: TSLA) back into private ownership, and quoted a price that was, apparently, a joke from cannabis culture he thought his girlfriend would find funny.

Don't let this happen to you.  

The SEC's complaint against Elon Musk, on the BBC.

The SEC's complaint against Elon Musk, on TechCrunch.


7. International - Fintech


The Belgian fintech platform B-Hive has launched an innovative program to improve cyber-security for start-ups.

Trusted Fintech, which was launched during the Digital Finance Europe conference in Brussels, will deliver a five-module programme focused around people, process and technology, which results in the start-up  being awarded  the tabel of ‘Trusted Fintech’  – a safety guarantee which B-Hive hopes will encourage further investmen in the start-ups.

Read about the Trusted Fintech programme on Forbes

8. International - Fintech

In Africa, registration has been opened for exhibitors and attendees for the Ghana Finance Week 2018 which will take place from October 10 to October 13.

"Achieving the Sustainable Development Goals through Innovative Finance" will be the theme for the four day event.

Details on GhanaWeb.