News Briefing - Crowdfunding, SME And Alternative Finance

Construction workers eat lunch 200 feet up in the air.

1.UK – FinTech

UKTechNews reports:

“Payments start-up Banked is poised to challenge the dominance of established players in the sector as it launches out of beta after securing another £2.35million in seed funding.

The London-based firm’s account-to-account payment software lets consumers, businesses and banks process payments in real-time, more securely, and for one-tenth of the traditional cost.

It has now raised a total of £5.35million and the latest investment was led by Force Over Mass, with participation from Backed, Acrew Capital (San Francisco based) and high net worth partners including the family office of serial investor and co-founder of indeed.com, Paul Forster.

By offering payments in real time, Banked enables merchants and customers to receive money from transactions as they happen, meaning they no longer have to wait days and weeks to see the funds.

The company charges just 0.1% to process payments – a fraction of the 1-4% charge typically seen across the market.”

 

2. US – FinTech

Crowdfundinsider brings news of a possible “fire sale” of a US P2P platform:

“There has been a lot of chatter regarding the fate of Fintech lenders in the past few weeks. The COVID-19 pandemic has hammered online lenders as sources of capital have shied away and some borrowers have backed off. Existing borrowers are not always making payments on loans. LendingClub (NYSE:LC) recently reported that it expected a 90% drop in loan originations this quarter. Today, Fitch Ratings said that the impact of COVID-19 may imperil the viability of some marketplace originators.

In a separate write up on Forbes today, it was reported that OnDeck (NYSE: ONDK) is for sale having hired Evercore to pitch the platform. The possible transfer was described as a “fire sale.”

In 2014, OnDeck IPOed at $10 a share with the stock price quickly jumping to over $20/share. Today, OnDeck trades for less than a dollar thus representing a serious decline in value. Its market cap stands at under $50 million.

Late last month, OnDeck reported a quarterly loss of $0.92 per share. The consensus estimate, according to Zacks, was $0.06 – thus representing a huge miss.

During the earnings call, OnDeck said it was pushing pause on new term loan and line of credit originations. The online lender said it will focus on serving existing customers and supporting the PPP program, for the time being. The company has also taken “aggressive measures” to reduce costs including an across the board 15% salary reduction and a 30% cut for the OnDeck CEO and board compensation.”

3. International – FinTech

Frankfurt-based SME lender Creditshelf has launched a €62m direct lending fund for German SMEs hit by coronavirus. AltFi reports:

“The Creditshelf Loan Fund, which is backed by the European Investment Fund as well as other investors has completed its first financing round.  The direct-lending fund aims to attract additional institutional investors over the course of several financing rounds, with a target of €150m total commitments. 

Just under half of the money - €30 million came from the EIF, with the rest from investors from Creditshelf shareholders including its two founders, Tim Thabe and Daniel Bartsch

Thabe, CEO and founding partner of Creditshelf said: “SMEs form the foundation for the German economy. They need financing funds for growth and investment - In the current situation as well as in the future." 

Creditshelf saw a 60 per cent increase in loan requests to €500 million compared to the same quarter of the previous year.”

 

4. International – FinTech

Bitcoin completes its third “halving” event. Crowdfundinsider reports:

“Bitcoin’s final block, before the latest halving, was mined by F2Pool, which is the blockchain-based network’s largest miner. F2Pool had also mined the first block after the BTC halving back in 2016.

The BTC halving occurs after every 210,000 Bitcoin blocks have been processed, which takes place once every four years. The event is promoted as a vital part of BTC’s digital scarcity model.

The cryptocurrency’s supporters argue that, unlike fiat currencies which are printed without any limits, Bitcoin has a limited supply that is algorithmically capped at 21 million.

Bitcoin enthusiasts claim that BTC will become more valuable because of its limited supply.”

 

5. International FinTech

More expansion at Revolut. AltFi reports:

“Digital banking service Revolut has hired a new CEO to bolster its operations in Singapore. 

James Shanahan officially joined the fintech in March 2020 and brings with him over 25 years of banking experience. 

Shanahan previously worked as chief of staff at Railsbank in Singapore and has held senior positions at AXA, Standard Chartered and Singapore Life.

Shanahan said: “Revolut has grown rapidly in Singapore and we continue to enjoy very positive momentum despite the short term social and economic restrictions.”

Further cementing the team, Rayson Tan, who has been chief compliance officer at Revolut since September 2019, has also taken on the roles of head of legal and chief risk officer.”