The debt side of crowdfinance – typically called P2P (“peer-to-peer”), online or marketplace lending – continues to mushroom at a neck breaking pace, attributable primarily to meatier yields that in many instances have returned more to investors in one month than conventional fixed-income asset classes do in an entire year. Cormac Leech of Liberum estimates that by 2016, P2P volumes in the U.K. and U.S. will reach $40 billion or 5 times the size of the total global market today.
In less than a decade, P2P lending has become a worldwide phenomenon, experiencing a number of watershed moments in the past few months alone.
In September, Lending Club, the world’s largest P2P platform, filed to go public in what is poised to be one of the ten biggest stock market debuts of an Internet company. It hopes to raise more than $500 million at an implied market capitalization of approximately $5.0 billion – representing a 33.3% increase in value in the last 6 months alone, and an annualized increase of 88.2%.
Last month, Prosper, the world’s second largest P2P platform, exceeded all expectations by revealing it surpassed over $2 billion in loans originations. This announcement came just 6 months after crossing the first $1 billion mark which took the company 8 years to accomplish! Check out: http://www.lendacademy.com/prosper-177-million-october/
A leading P2P analytics platform, Orchard Platform, recently announced it completed a $12 million Series A round from banking veterans as well as some of the most well-versed venture capitalists in the space. Orchard’s cap table includes: Spark Capital; Canaan Partners; John Mack, former chairman and CEO of Morgan Stanley; Tom Glocer, former CEO of Thomson Reuters; Vikram Pandit, Former CEO of Citigroup; Hans Morris, former president of Visa and managing partner at NYCA; Nigel Morris, managing partner at QED Investors and co-founder of Capital One Financial Services; Anthony Abenante, former CEO of Instinet and senior adviser at KCG Holdings and Max Levchin, founder & CEO of Affirm, and former co-founder and CTO of Paypal. See: http://www.orchardplatform.com/news/orchard-lands-a-12-million-investment-from-some-of-the-industrys-biggest-names/
As venture capital pursues P2P infrastructure plays, and as institutional as well as retail dollars rush to obtain newly listed P2P loans, a new generation of businesses are sprouting up across the planet to support this prolific growth. The rapid maturation of the global P2P and online lending industry was captured in Orchard’s recently published “Lendscape”. This valuable infographic, which underscores the expanding ecosystem and highlights its key players, can be found at http://www.orchardplatform.com/blog/the-orchard-lendscape/. There are also a number of presentations from LendIt Europe 2014 that include great statistics on the progression of the industry which can be found at: http://blog.lendit.co/lendit-europe-keynote-presentations/.
While the growth is staggering, there is more to P2P lending than attractive historical returns and innovative business models. According to Bo Brustkern, co-founder of Lend Academy Investments and the LendIt Conference, “P2P is deleveraging America.”
As Bo eloquently articulated in a private P2P seminar in Atlanta last month, “P2P is improving the economic status of our fellow citizens by replacing high-cost entrapment-debt with more efficient capital. This is American ingenuity at its Finest.”
A recap of that event that featured demos from Lend Academy Investments, P2P technology platform Nickel Steamroller and leading small business lending platform Funding Circle can be found at: http://p2plendingexpert.com/returns-without-the-work-lend-academy-managed-accounts/
Investors, certified financial planners and wealth managers interested in learning how to invest in P2P are welcome to join us at these private seminars in key cities across the U.S. Click here to get on the guest list.