BankTech

25 Global Alternative Lending Startups to Watch Out For

MEDICIFounder and Chief Strategy & Innovation Officer

The future of alternative lending is looking bright in the US as well as globally. Nontraditional alternative lending has grown rapidly in the last few years. P2P lending segment emerged first in 2005—focusing on lending and borrowing. P2P lending platforms, also known as marketplace lending platforms, offered an alternative to traditional banking and payment systems, since they cater to the underserved with services like consumer lending, student loans, real estate and small-business lending products. While these online providers create a marketplace for lenders and borrowers, lenders can expect a higher rate of return on their investments compared with traditional bank deposits. Borrowers who are unable to qualify for loans from banks turn to these alternatives to obtain credit—possibly at a lower interest rate than they would have received from their bank, based on their respective credit profiles. LTP brings to you the consolidated list of 25 global Alternative lending startups:

1. SoFi (US): SoFi is a US-based, online, peer-to-peer loan platform that connects students and recent graduates with alumni and institutional investors via school-specific student loan funds. The company has had a strong impact and has gained a large momentum for solving the issue of high interest rates on student/education loans. Some of the investors for the platform are Lakestar, Marco Rossi (VP Service Contracts SBU @ Dresser Rand Group, Inc), Institutional Venture Partners (IVP) and Ron Suber (President @Prosper).

2. Avant (US): Avant’s impact in the personal lending space is marked by its use of latest technology and statistical methods which help the company meet customers’ unique financial needs and also offer lower interest rates compared to competitors. To set the ground stronger, Avant has acquired ReadyForZero, which creates online financial software for actively managing personal debt and credit. Major investors for the firm include the names such as Victory Park Capital, DFJ Growth, Jefferies & Company and RRE Ventures.

3. LendKey (US): New York-based company LendKey operates on the model of connecting banks and credit unions with borrowers through online channels. The company provides an end-to-end lending platform, allowing financial institutions to create online lending programs and bring low-cost loans directly to consumers. The company enables this by using a cloud-based platform.

4. Lending Home (US): Founded in October, 2013, Lending Home is a San Francisco-based company that operates in the real estate loan space. Lending Home is a relatively new company in the personal lending space but has shown an impressive growth by achieving $100 million in loan origination volume within seven months of its launch.

5. Common Bond (US): Common Bond is a New York-based company which started its operations in 2012. The company’s operations bring along a strong focus around education refinancing and enables the loan disbursement at APRs as low as 1.93%.

6. Affirm (US): Established in 2013, Affirm was founded by PayPal’s Co-founder Max Levchin. Affirm is a data-driven company which offers consumer credit at the point-of-sale. This company is found to participate in the personal lending space by addressing the problem associated with the use of a credit card and its monthly interest charges through its product Split Pay.

7. OnDeck (US): Founded in 2007, the company has processed loans worth $3+ billion.The major investors in the firm are Tiger Global Management, Institutional Venture Partners (IVP), Industry Ventures, and Google Ventures.

8. RateSetter (UK): RateSetter offers a P2P platform for the UK market which can help borrowers secure loans easily and at much lower interest rates than traditional banks offer. RateSetter is a simple exchange platform where people can lend/borrow money and interact directly with each other. Members decide their own interest rates and no banks are involved in the whole process.

9. MarketInvoice (UK): Founded in 2011, MarketInvoice is a UK-based FinTech startup and is a disruptor of traditional bank finance. The company is an online peer-to-peer lending platform where companies can borrow against unpaid invoices. It is an online marketplace to fund working capital to SMEs; large institutional investors provide working capital to small businesses by acquiring their unpaid invoices.{B2B}

10. Funding Circle (US & UK): Funding Circle is the world’s leading marketplace exclusively focused on small businesses with more than £600M ($1 billion) lent to 10,000 businesses in the UK and the USA. Major investors are Temasek Holdings, BlackRock and Sands Capital Ventures.{B2B}

11. StreetShares (US): StreetShares is an online Peer-to-Peer lending site that connects U.S. investors directly with small and medium sized business borrowers. It connects investors and borrowers from within the same communities (starting with veterans) through an innovative affinity-based marketing strategy and flexible online bidding platform.The major investment in the company has been made by Community Investment Management (CIM), Accion Frontier and Fenway Summer.{B2B}

12. Zopa (UK): Zopa is the one of UK's largest peer-to-peer lending service and has lent £1.05 billion to over 110,000 people since its inception in 2005. Major investors for this UK firm are Arrowgrass Capital, Orange Growth Capital (OGC), Bessemer Venture Partners and Forward Partners.

13. iwoca (UK): London FinTech startup iwoca is Europe’s fastest-growing online short-term lender for self-employed and small businesses. The company’s innovation lies in the loan providing process which starts from the online application process, allowing for same-day loan approval and disbursement. The company is four years old and operates in the UK, Germany, Spain and Poland.{B2B}

14. i-lend (India): i-lend, India's first and leading online peer-to-peer platform, connects borrowers who are in need of money to lenders who are ready to invest. Launched as an initiative of Dipamkara Web Ventures Private Limited, i-lend helps borrowers get loans at low rates and lenders get better returns from mutually beneficial transactions between them.

15. Peerform (US): Founded in 2010 by Wall Street executives with extensive backgrounds in finance and technology, the Peerform marketplace lending platform is dedicated to helping dependable borrowers.

16. Daric (US): New peer-to-peer lending platform Daric specializes in small business loans up to $50,000.

17. BorrowersFirst (US): For BorrowerFirst, loan amounts range from $2,500 to $35,000 and amortize over three or five years. Interest rates range from 5.99% to 26.99% per year.

18. WeFinance (US): On the WeFinance platform, borrowers can write their own loan applications and link to their Facebook and LinkedIn accounts to verify their identity, educational background and work history.

19. Kiva (US): Kiva Microfunds (commonly known by its domain name, Kiva.org) is a nonprofit organization that allows people to lend money via the Internet to low-income / underserved entrepreneurs and students in over 70 countries. Kiva's mission is “to connect people through lending to alleviate poverty.”

20. LendingStar (US): LendingStar is a peer-to-peer market place for smart businesses. LendingsStar is a global, supply and demand based online marketplace for debt financing, which works with minimal intervention from investors.

21. Faircent (India): Started its operations in July 2014 and claims to process over USD 0.121 million worth of loans every month on the platform through an open bidding model. Faircent.com is catering to the increasing and substantial urban middle-class, both as a source of cheap credit and a lucrative investment option. M&S Partner is one of the leading investor for the company.

22. Lending Club (US): Lending Club recently announced that it had reached $11 billion in loans on its platform. Lending Club, which is America’s no. 1 peer-to-peer credit marketplace, achieved this milestone over the past eight years since its inception in June 2007.

23. NeoGrowth (India): NeoGrowth Credit Pvt Ltd is a non-deposit taking NBFC registered with RBI, providing short term business loans to Indian merchants. Major investments in the company has been made by Accion Frontier, Aspada and Khosla Impact.{B2B}

24. Milaap (India): Milaap is an Indian P2P firm which helps you raise money, lend a little or donate to the causes and projects you care about.The major investors for the company are Khosla ImpactLionRock Capital (Hong Kong) and Unitus Seed Fund.

25. Rang De (India): India's first low-cost online crowdfunding platform that provides microcredit to low-income entrepreneurs and students.

26. Prosper (US): Prosper issued loans worth $912.4 million in Q2-2015, up 147% from Q2 2014. The Prosper platform offers consumers access to loans based on their personal credit for the purpose of debt consolidation, large purchases, medical expenses, and new businesses.The leading investors for the company are Target Ventures, USAA, Passport Capital, Breyer Capital to name a few.

27. ThinCats (Australia): Launched in Australia, ThinCats is a new peer-to-peer business lending platform poised to help the country’s 2.1 million small and medium-sized businesses. For SMEs, the company is bringing access to cost-effective funding while for investors, it is providing an ideal platform to lend directly to such businesses.

28. lendstreet (US): LendStreet is a marketplace lending platform that allows consumers to restructure and refinance their distressed debt. By partnering with banks, collection companies, debt settlement agencies and others, LendStreet acquires and onboards borrowers that are currently in default, offering them a new loan financed through a marketplace platform with accredited and institutional investors.The major investors for the company are Aslanoba Capital and Accion Frontier

You can also check out our following reports on Lending Industry:

1. LTP9 Leaderboard in Technology Based Personal Lending.

2. LTP9 Leaderboard: Companies Leading the Way in Technology Based Alternative Business Lending

3. Transformation of Peer-to-Peer (P2P) Lending in the U.S. – A Research Report

4. U.S. Tech Platform based Alternative Lending Market Report 2015

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”