News Briefing - Crowdfunding, SME And Alternative Finance

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1. UK – FinTech

P2P Finance News reports: 


“Peer-to-peer lenders are being pushed towards institutional funding to boost liquidity, as the regulator’s crackdown on mini-bonds leads to caution among retail investors in the wider alternative finance industry. 

The Financial Conduct Authority (FCA) is planning to make a ban on the marketing of mini bonds to retail investors permanent but has also extended the proposal to include speculative illiquid securities, which could hit crowd bond providers. 

There are hopes that crowdfunding platforms will be exempt from the ban as they are regulated, unlike mini-bond providers, but the move has already resulted in property P2P lender CrowdLords ceasing regulated activity as it considers its options. It was also revealed last month that the Financial Services Compensation Scheme believes that Basset & Gold mini-bonds marketed by regulated parent company B&G Finance before its collapse were mis-sold. 

Mark Turner, managing director in Duff & Phelps’ compliance and regulatory consulting practice, said the FCA’s clampdown on mini-bonds and the way it has lumped it together with warnings about the risks of Innovative Finance ISAs could deter retail investors from P2P lending. The coronavirus crisis has also made many retail investors more cautious, which Turner said means platforms are considering institutional funding to manage liquidity and make withdrawals easier.” 

2. International – FinTech 

Sifted runs an opinion piece on the need for more FinTech angels in Europe. 

“As the European startup scene continues to mature, we’re lucky to have some incredible angels here — think Robin Klein or Sophia Bendz — but, as we pull ourselves out of a pandemic and through a recession, it’s time to supercharge.  

The US has a markedly different attitude towards investing than many of us in Europe. 55% of Americans own stock (note: this includes non-technology companies) compared to, for example, 12% of Brits. 

Add to this a less mature tech scene and it makes sense that so far, angel investing has been for the few, not the many. Exits have been growing, which create liquidity to invest for both founders and startup employees; for example the Cambridge startup scene was strengthened after Arm’s sale. And alumni syndicate groups continue to grow and act as entry points; a way to assess deals collaboratively and learn from more experienced angels in the group.”  


3. International – FinTech 

ANZ, Commonwealth Bank of Australia, Westpac, IBM and Scentre Group are to formally launch a blockchain-based platform that reduces the time to issue a bank guarantee from one month to one day, according to Finextra.  

“The commercial roll out of the platform, dubbed Lygon, follows a successful pilot with 20 businesses last year that transformed the cumbersome, paper-based, slow and costly bank guarantee process into digital form.

Thousands of merchants around Australia need bank guarantees to secure a lease over a retail tenancy. Historically, these guarantees have been issued manually and on paper, with the process taking up to a month.” 


4. International – FinTech 

AltFi reports a big raise by a direct lender: 

“So far 2020 has been a pivotal one for non-bank lenders. The spectre of a global recession brought on by the pandemic is the industry's first big test.   

Germany-based Auxmoney has bucked a mood of scepticism, however, with massive €150m fundraise, the largest fintech funding round in the eurozone in 2020 so far.   

The new equity funding comes from a number of investors led by Centerbridge, a private investment management firm based in New York.   

Centerbridge is acquiring stakes from existing investors as well as adding new capital to become a majority shareholder.   

Existing leading venture capital investors such as Foundation Capital, Index Ventures, and Union Square Ventures remain fully invested.” 


5. International – FinTech 

Finextra reports: 

“Singaporean fintech firm Atlantis is entering the Indian market with Neo-Bank, an app-based banking platform targeting millennials and Gen-z. 

Neo-Bank is pushing the concept of 'self-driven finance' by providing its customers with a smart, personalised platform with an initial focus on India and South-East Asia.

The company initially has its eyes on India's 10 million-plus youth segment. Atlantis claims a waitlist of 5000 users and expects to onboard 3000 registrants within its first three months, offering a range of personal financial management tools, investment options and a companion savings account and bank card.”