News Briefing - Crowdfunding, SME And Alternative Finance

crowd of business people at an event

1.UK – P2P

P2P Finance News reports figures from Growth Street.

 

“GROWTH Street investors have backed £450m of revolving credit facilities, the peer-to-peer business lending platform has revealed.

The platform said it has provided £80m of funding since launch in 2014, with £30m still under management.

These numbers only include the initial 30-day revolving credit line that is provided to borrowers through the platform’s GrowthLine product.

The total value of Growth Street’s loanbook is £450m once monthly rollovers are factored in.

It comes as Growth Street has been boosting its regional presence in areas where it feels small- and medium-sized enterprises (SMEs) are underserved such as in the West Midlands and Wales.”

 

2. UK – AltFi

 

A new entrant into the LCF conflict. FT Adviser reports.

“Law firm Shearman & Sterling [has] sent a letter to the FSCS asking it to consider whether London Capital & Finance carried out activities in two regulated areas, namely "dealing in investments as principal" and "operating a collective investment scheme". 

The FSCS cannot currently accept claims for compensation from 14,000 nce Newsbondholders who invested in London Capital & Finance, as the act of issuing mini-bonds in the UK is not a regulated activity. 

But the scheme has previously suggested bondholders could be entitled to compensation if they can prove they had been advised to buy the bonds, leading administrators for London Capital & Finance to comb through recordings of phone calls between the company's representatives and its customers to find out whether they were given advice.

An FSCS representative had clarified that because the firm was FCA-authorised, it would not matter if it lacked the appropriate regulatory permission and if a particular regulated activity, such as advising, was actually carried out in practice compensation could potentially be offered. 

Shearman & Sterling is providing pro bono advice to some bondholders and met with the FSCS last week to discuss analysis which "supports the conclusion" the mini-bond company operated in further regulated activities, not just the provision of advice

In its letter Shearman & Sterling said the losses to a large number of private individuals who invested in London Capital & Finance had been "life changing", and investors had "rightly understood that the FSCS would stand behind their investments". 

The letter read: "LC&F therefore presents exactly the situation that FSCS was established by Parliament to address.

"...it is quite reasonable to regard investments in LC&F as taking place pursuant to 'regulated activities' for these purposes generically, particularly 'dealing in investments as principal' and 'operating a collective investment scheme'.

"We are of the view that FSCS would be acting lawfully and correctly in opening up the scheme to bondholders which fall within eligible personal categories on these bases." 

The FSCS has confirmed it met with Shearman & Sterling and FTAdviser understands the scheme will consider the latest arguments as part of its work to establish whether London Capital & Finance might have carried out regulated activities, for which it could compensate customers. 

London Capital & Finance went into administration at the end of January, putting the funds of more than 14,000 bondholders at risk.

Shortly before the collapse the Financial Conduct Authority had ordered London Capital & Finance to stop marketing its fixed-rate investment bonds and Isa products and the provider had its assets frozen by the regulator.

The FCA alleged the Tunbridge Wells-based firm had signed clients up to fixed-rate Isas promising 8 per cent interest, with investors' capital then invested into mini-bonds used to issue loans to small businesses.”

3. UK – AltFi

A guide to EIS investment.

 

4. US – FinTech

The Block offers up one of the finer names in the sector – a raise for Data Gumbo Corp

 

Houston-based blockchain startup Data Gumbo Corp has raised $6 million in funding from international energy companies, World Oil writes, with Saudi's Aramco and Equinor Technology Ventures co-leading the Series A. 

Data Gumbo has created a Blockchain-as-a-Service (BaaS) platform designed for industrial customers, especially from the energy industry, to help them manage smart contracts across the oil and gas supply chain. The platform automates calculation, reconciliation and invoice payments, allegedly helping customers reduce costs by 10 per cent as well as offering improved transparency.

“We enabled the first application of blockchain technology in the offshore drilling industry and will continue to break new ground with applications of BaaS to improve the bottom line of companies of all sizes," said Andrew Bruce, CEO of Data Gumbo. "Blockchain will have a major impact on the oil and gas industry - and all global industries."

The company will use the new funds to expand its commercial blockchain network. It will also make new hires for both its Houston headquarters and Norwegian offices.


5. International – FinTech

The Block on the latest from high-profile platform, Bitfinex.

“Bitfinex's parent company iFinex has received $1 billion in hard and soft commitments for an Initial Exchange Offering, according to a report by CoinDesk, citing a WeChat post from a Bitfinex shareholder. According to Dong Zhao, an OTC trader in China who owns Bitfinex shares, there's "a high possibility Bitfinex will not conduct a public sale" for its tokens. Zhao told CoinDesk that the exchange has received $1 billion in both hard and soft commitments for LEO, the name of Bitfinex's exchange token. Soft commitments give investors the option of backing out of the deal.