News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – P2P

P2P Finance News reports:

“ABLRATE will soon be offering its investors more easily accessible, in-depth data on its website, to reassure them about the health of the platform.

The asset-backed peer-to-peer lender said that it is making “radical changes”, both to comply with the incoming regulation changes on 9 December and to “excel in having the best P2P platform available”.

The firm said that a key area of focus for the website overhaul is the risk management and statistics pages.

 “We understand with recent news of P2P platforms failing that lenders want to make sure that Ablrate and its loans are in good health, this is where the statistics page will come in,” the firm said.

“This page will provide a range of information from the simple stats found on the current homepage to more in-depth breakdowns on defaulted loans and the average returns.”


2. UK – AltFi

Investment Week reports:

“Barriers to entry for new investment firms are low, but barriers to success are high, according to a report from CFA UK published today (4 November).

The report, Start-ups in UK Asset Management: A Study of Barriers to Entry & Success, follows the publication of the FCA's Asset Management Market Study, which also found that barriers to entry in the sector are relatively low.

The CFA UK report focused on the five-year track record of start-ups in the retail investment market, and how easily they can establish profitable and successful operations.

Analysis of data logged by the European Securities and Markets Authority (ESMA) from the start of 2014 to the end of 2018 found that over 1000 new start-ups were authorised by the FCA "to conduct investment management in the UK" in this five-year period.

However, the study found that barriers to success were high. As at April 2019, 5% of those newly authorised firms were already inactive. Qualitative feedback from interviewees also indicated that "survival" is not equal to "successful".

The registers also show that 2017 and 2018 were particularly weak years for start-up activity, with 47 new firms authorised by the FCA in 2018 and 192 in 2017. The average for each of the four years between 2013 and 2016 was 265.

Research findings and feedback from participants indicates the acquisition of customers and assets under management is the most significant barrier to success.

Based on the findings, CFA UK has made two key recommendations.

"Competition policy should be updated to focus more on ways to overcome inertia and to help consumers understand the potential costs and value of switching providers," it stated.

"More could be done to promote the technological innovations that would allow consumers and suppliers to find each other faster and cheaper".


3. UK – AltFi

AltFi on  growth initiative and raise by Alternative Business Funding.

Alternative Business Funding (ABF), the government-approved referral platform, has announced a £6m fundraise, as it looks to drive up registration numbers from 25,000 to 160,00 users in five years.

The SME finance platform has appointed boutique advisor Lazarus Consulting to canvass interest in the fundraiser.

Currently, ABF has over 25,000 registered small businesses on its books.

It is now looking to grow its user base to 160,000 in five years, with the goal of securing them over £500m in funding. ABF said it is looking for one or multiple investors.”

4. US – AltFi


TechCrunch profiles a young entrepreneur and influencer.

“Her newest venture, Moe Assist, claims to be the first project management and payments tool for influencers. Last month, the product launched with $1.2 million in funding from Rebecca Minkoff and other unnamed investors. Creators and influencers like Bernstein are forging a path from content creator to full-fledged business, with multiple revenue streams via podcasts, licensing deals, branded merchandise and even software products.”


5. International – FinTech

A surge in €100m+ (£86m+) funding deals for European tech companies over the past 12 months has been driven by an increase in capital flowing into the European fintech industry, according to a report analysed in an AltFi article.

“The report has been compiled by Stripe and and scrutinises the state of late-stage technology funding in Europe.

The report highlights that 2019 has been a record year for late-stage investments in European tech companies, citing 52 deals of €100m (£86m) or more.

The surge has been driven by funding deals for the likes of Monzo, Transferwise in the UK and N26 in Germany, the report says.

It adds that, as well as fintech, software sectors in Europe are driving the late-stage financing surge.”