Weekly Online Lending Snapshot – Aug 11, 2017
This week PayPal announced that it will acquire small business lender Swift Financial. Swift provides small business owners with working capital and has provided funding for over 20,000 small businesses. PayPal will use Swift’s data and technology to improve its underwriting capabilities and expand its own working capital offering. It was reported that Earnest is running a dual-track fundraising process and is seeking to raise $50 million in new equity, while simultaneously working with Barclays to find a buyer. Prosper is also seeking to raise $50 million at a valuation of $550 million, a significant haircut to its prior valuation of $1.9 billion. OnDeck stock rose this week by as much as 17% on Monday after they released their upbeat outlook in their second-quarter earnings report. The company said they have been successful in efforts to cut costs and tighten borrowing criteria. LendingClub’s stock also experienced an 8% rise this week after posting the second-highest quarterly revenue in its history. LendingClub now expects full-year total net revenue to be in the range of $585 million to $600 million. In international online lending news, the central bank of China, People’s Bank of China (PBOC), released a report announcing that it will strengthen its regulation of companies in the fintech sector including P2P lenders. The PBOC will soon monitor P2P lender’s liquidity and lending policies to prevent cyclical risks and cross-market risk transmission. The U.K. financial watchdog, the Financial Conduct Authority (FCA), is also assessing tougher regulations for the P2P lending space to take effect as early as this fall. In securitizations, Kabbage issued $25 million of additional Series 2017-1 Class A, Class B, Class C, and Class D Notes following the initial issuance of $525 million of Series 2017-1 notes back in March. Kroll Bond Ratings assigned the Class A, Class B, Class C, and Class D Notes initial ratings of A (sf), BBB (sf), BB (sf), and B (sf) respectively.
Full weekly snapshot reports can be downloaded on our research page here.
Thanks and have a great weekend!