News Briefing - Crowdfunding, SME And Alternative Finance

two small test tubes

1. UK – FinTech  

 

Crowdfunding platform Crowdcube has launched a new platform aimed at later-stage businesses, according to AltFi.  

“The Direct Community Offer (DCO) allows early investors to get a return on their investments while simultaneously giving new investors the chance to get a slice of the pie too.  

Early investors often struggle to achieve liquidity, a struggle that’s been made worse by companies delaying IPO, instead opting to remain private for longer.  

This is not Crowdcube’s first foray into the world of secondary share sales, the platform has previously completed secondary transactions with singe investors, such as Revolut and Brewdog.  

The DCO aims to “democratise the process” of secondary sales and will offer new investors the chance to buy early investors’ stakes.” 

2. UK – FinTech 

 

One in 10 businesses have admitted they are at risk of insolvency due to the pandemic according to a P2P Finance News report. 

“The figure is revealed in the latest business impact of coronavirus survey from the Office for National Statistics, which shows 10 per cent said their enterprise is at “moderate risk of insolvency” and one per cent put the risk at “severe”. 

The survey also found that 12 per cent of the workforce remain on furlough leave, with 67 per cent of furloughed employees receiving top-ups to their pay. 

Almost a quarter, 23 per cent, said turnover has decreased by up to 20 per cent, rising to 50 per cent among 17 per cent of respondents. 

More worryingly for firms and their staff, half said they have paused trading as they don’t have enough cash to last six months, and 11 per said they have none. 

Jack Izzard, director of The Great British Bounce Back, a community of small and micro businesses helping promote firms to fight back against the economic impact of Covid-19, said the government has failed to provide support “of any kind to a significant percentage” of its members.” 

 

3. US – FinTech 

 

Crowdfundinsider runs a feature interview with the CEO of troubled Lending Club. 

“Lending Club  is the leading online consumer lender in the US and the first big Fintech lender to go public on the NYSE. Over $50 billion in lending has been originated on the platform that claims more than 3 million customers. 

The last few years have been tough for the Fintech due to multiple reasons. The COVID-19 pandemic then hammered the platform, just as it did to all other online lenders. Yet in the most recent earnings call earlier this month, LendingClub CEO Scott Sanborn expressed his ongoing optimism and determination to see his company succeed in a tough environment and thrive once the c0untry has turned the corner on the health crisis. 

LendingClub said that while lending was down, loan investor demand was showing early signs of recovery. Sanborn said that LendingClub has remained focused on the things they can control and are successfully executing against their strategic priorities. 

A key strategic move in LendingClub’s future is the acquisition of Radius Bank – an event that will enable the company to transition from a top online lender to a full-stack digital bank or “marketplace bank.” 

 

4. International – FinTech 

 

Railsbank has confirmed its intent to acquire the UK arm of disgraced Germany payments processor Wirecard. Finextra reports: 

“The buy-out, confirmed by Sifted, ends a tumultuous period for Wirecard's UK business, which sent shudders through the fintech industry after it was temporarily shut down by the Financial Conduct Authority.

Railsbank will now acquire the remaining assets of Wirecard Card Services, clients and a number of employees, according to people briefed on the matter. London-based Railsbank confirmed to Sifted it had given a purchase term sheet to WCS, set to be finalised in November, but declined to comment on the amount.

WCS once settled card payments for approximately 70 UK clients, many of whom have since moved off the platform after becoming mired in the accounting scandal engulfing the now insolvent German parent.” 

 

5. International – FinTech 

 

B2B banking in Australia shows signs of life. Finextra reports: 

“Parpera, an Australian fintech building a digital ​banking ​alternative for businesses, freelancers, and entrepreneurs, has opened shares for trading with equity crowdfunding platform Equitise. 

Founded by Daniel Cannizzaro, a former EY financial services management consultant, each Parpera share is valued at $5 with a minimum investment of $250. With a minimum funding target of $250,000, trading in Paropera shares is now at $400,000 with the aim of raising up to $800,000.

The firm says it will provide businesses with a digital wallet, card, payment, and money management capabilities via an in-app marketplace of third party providers.

The company has secured an initial strategic integration partnership with accounting software provider MYOB, which will provide Parpera with App Partner and App Marketplace integration and marketing access to ~1m Australian businesses.

Parpera founder Cannizzaro says the firm has an early waitlist of 1000 early registrations.”