News Briefing - Crowdfunding, SME And Alternative Finance

three women and a man discuss reports

1.UK – FinTech reports:

Chip, the London-based fintech that created an automatic savings account, has raised £7.3 million, with £3.8 million crowdfunded by customers and the remainder from unnamed angel investors. The campaign ran for three weeks in September and is currently Crowdcube’s most participated-in crowdfund, with 7,182 investors.

The startup provides a free app “to make saving as easy as spending.” The AI-driven system calculates how much a user could save, gives the option to decline it, and then automatically transfers the amount to user’s Chip account. Chip has saved over £85 million for its users to date.”

2. UK – P2P


P2P Finance News reports:

“PEER-TO-PEER property lender Loanpad is forecasting profitability by next year, which it attributes to its focus on sustainability over “exponential early growth”.

The firm noted recent platform failures and said that the industry should focus on running their businesses “in a stable manner”. It went on to criticize platforms that generate a substantial proportion of their income from new loan origination and said that this was one of the issues identified through the corporate failures to date.

“At Loanpad, despite being just nine months post-launch, we anticipate reaching profitability and self-sustainability by 2020,” the firm said in a blog post on its website. “This is as a result of our unmovable focus on sustainability ahead of exponential early growth.”

Loanpad went on to highlight a lack of profitability across the industry and opposed the supposition that bigger platforms are safer for investors.”

3. US – AltFi

AltFi reports:

“Aura, a lender that provides affordable loans to low-income families in the US, has received a $130m (£101m) asset-backed revolving credit facility from a New York-based investment management firm.

The credit facility, from Varadero Capital, brings Aura's total lending capacity to $259m (£201m).

The credit facility extends an existing relationship between Aura and Varadero Capital.

Aura says it has now provided approximately $635m (£493m) in loans to more than 475,000 borrowers since its inception in 2014.”


4. US – FinTech

Crowdfundinsider reports:

“Another Canadian cryptocurrency exchange has folded with customer money outstanding.

According to an affidavit filed at the BC Supreme Court by Sammy Wu, Lead Investigator (Enforcement) at the British Columbia Securities Commission (BCSC), the Einstein Exchange in Vancouver has gone offline, its offices are locked and its owner-operator, Michael Gokturk, cannot be reached.

Wu states in that affidavit, dated November 1st, that the Einstein exchange has been under formal investigation by the BCSC since May 6, 2019, and currently owes customers $16 322 705 CAD.”


5. International -  FinTech


Crowdfundinsider on a crowdfunding harmonisation initiative by an EC Commissioner whose portfolio includes Financial Stability, Financial Services, and the Capital Markets Union, indicating harmonized crowdfunding rules may be forthcoming before the end of the year.

“Harmonization across all EU member states could dramatically help European SMEs and entrepreneurs access much-needed growth capital.  Platforms could operate across national borders with the assurance of a single set of regulations.

Currently, investment crowdfunding platforms must adhere to national, member state rules which vary dramatically across Europe. This fragmented ecosystem stands in stark contrast to what the European Union ostensibly seeks to achieve. Capital Markets Union has been a longstanding and obvious policy goal of Europe, but while simple in concept, the reality has been far more difficult to accomplish.

The most robust market for investment crowdfunding remains the UK – a country that will sometime soon exit Europe. While the UK platforms will continue to provide online capital formation across the continent, a single set of rules will help all involved. It will also foster competition between crowdfunding providers.”