Funding Circle Marketplace Lending: How to Get to the Golden Age - - PowerPoint PPT Presentation
Funding Circle Marketplace Lending: How to Get to the Golden Age Sam Hodges, Co-Founder and US Managing Director April 2016 Funding Circle is the global leader in marketplace lending to small businesses Funding Circle Origination Volume ($M)
Marketplace Lending: How to Get to the Golden Age
Sam Hodges, Co-Founder and US Managing Director April 2016
Funding Circle is the global leader in marketplace lending to small businesses
Funding Circle Origination Volume ($M)
October 2015 Launch in Germany, Spain & Netherlands October 2013 Launch in the US August 2010 Launch in the UK 2010 2011 2012 2013 2014 2015 1098.3992 482.183 197.184 74.8442 26.4442 3.3413
business borrowers
Raised in equity capital
Employees in 5 offices
Investors globally
Operating countries
UK, US, Spain, Germany, Netherlands
$200M+
raised by SME Income Fund Jörg Asmussen joins board
Feb 2016
$150M
raised from blue chip investors
SME Income Fund
Launched in Continental Europe
Nov 2015 Oct 2015 Apr 2015
“The marketplace model will eventually become the institutional framework of the global financial system – and this will happen within 20 years.”
SOURCE: Bank of America Merrill Lynch
US High Yield Spread (BofA ML, option-adjusted)
3% 9% 2013-12-022014-02-212014-05-142014-07-312014-10-17 2015-01-072015-03-262015-06-162015-09-03 2015-11-202016-02-10
Credit Performance Stability
Operational Quality & Controls
Technology trigger Peak of inflated expectations Trough of disillusionment Slope of enlightenment Sustainable growth Time Visibility
SOURCE: Gartner
Marketplace lending is extremely well positioned in a period of uncertainty
Compressed yields in traditional asset classes Low interest rate environment Continuing instability of the banking sector
Reaching scale in a cost-effective way
Predictable credit outcomes with transparent performance
Diversified funding sources without systemic risk Thoughtful levels of borrower and investor protection coupled with great customer service
Operational discipline Controlled risk Stable lending capital Infrastructure & transparency
Whole loan marketplace
Funding Circle SME Income Fund Institutional investors
Fractional marketplace
Individual investors1 Private funds
Investors
1) In US: Accredited Investors
Permanent capital vehicle Purchasing loans in 5 countries Traded publicly On the LSE SME Income Fund
No maturity transformation No risk of a bank run No deposits Investment capital Do not hold inventory Lower capital requirements
Rahul Pakrashi Chief Risk Officer (UK) Manpreet Dhot Chief Risk Officer (US) Jerome Le Luel Global Chief Risk Officer Torsten Nahm Chief Risk Officer (CE)
15
Governance structure
As we grow, we continue to collect more data – and that means our level of risk assessment is getting stronger everyday.
360 view of small businesses Global learnings and experience
More loans/ data Better marketing & acquisition costs Higher acceptance rates Better models & underwriting processes
“Funding Circle’s process was fast. It felt like they had compassion for me as a new business owner, and an understanding of my financial needs.”
Founder/CEO
Americans – half the private sector workforce1
Small business creates
sector jobs1
$100K to $1M cannot get full financing2 Small business employ
SOURCE: 1) Harvard Business School; 2) Federal Reserve Bank of New York
US net promoter score
FC Banks FC Banks
UK net promoter score
Financials Loan by loan detail Investor net returns
Operational discipline Controlled risk Stable lending capital Infrastructure & transparency
Funding Circle in 2025: $100B
Origination p.a.
3M
New jobs p.a.
750,000
SMBs p.a.
2M
Investors