New Robo Fund from LendingRobot Leverages Automation and the Blockchain

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With the stock market rallying to new highs, the new robo fund from LendingRobot may have arrived just in time for people looking to diversify their portfolios with investments in the alternative lending market. LendingRobot Series makes it easy for peer lending investors to put money to work in different timeframes and risk exposures with returns ranging from 6.86% to more than 9%. The solution – part roboadvisory, part hedge fund – converts clients’ contributions into units which are invested across four leading lending marketplaces – Funding Circle, Lending Club, Lending Home, and Prosper. LendingRobot CEO Emmanuel Marot says that the new solution is designed to take advantage of the “excellent performance” of alternative lending investments and help investors avoid the problem of “fragmentation” that adds complexity to the process.

“That’s why we’ve created LendingRobot Series: to provide investors that understand the value of investing in alternative lending with the confidence that comes from intelligent automation, easy liquidity, and complete transparency,” Marot explained.

LendingRobot_stage_January2017

Pictured: LendingRobot CEO Emmanuel Marot demonstrating his platform’s dashboard at FinovateSpring 2016.

That “complete transparency” comes courtesy of LendingRobot’s decision to leverage blockchain technology to create a detailed, weekly ledger of the fund’s holdings. LendingRobot Series uses a hash code signature and notarization by Ethereum’s blockchain, to prevent data tampering, and assets are held in a bankruptcy protection vehicle with no liabilities other than its investors. The service charges a flat 1% a year management fee and caps fund expenses at 0.59% with no performance fees.. These compare favorably with the notorious “2% and 20%” demanded by most hedge funds.

LendingRobot supports four “Series” investors can choose from based on their investment preferences: short term aggressive and conservative, and long term aggressive and conservative. Average performance ranges from 6.86% for short-term conservative to 9.66% for long-term aggressive. Average maturity for short term series is 18 months. Long-term series maturities are 30-31 months.

Headquartered in Seattle, Washington, LendingRobot demonstrated its technology at FinovateSpring 2016, where it won Best of Show. The company has raised $3 million in funding, and includes Runa Capital and Club Italia Investimenti among its investors. TechCrunch profiled the company last summer, quoting Marot’s optimism toward the “insane growth in the peer lending market.” LendingRobot launched its P2P investment tracking mobile app – dubbed “Mint for P2P Lending Accounts” – last spring.

Finovate Alumni News

On Finovate.com

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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  • Finovate Debuts: Juvo’s Identity Scoring Builds Credit for the Underserved.

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  • Techfoliance features Dyme, Personetics, and Finn.ai.
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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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  • “Five Degrees Raises $10 Million in New Funding”

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This post will be updated throughout the day as news and developments emerge. You can also follow alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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  • Tradeshift Closes $75 Million Series D Round, Boosts Valuation to $500 Million.
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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

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  • Crowdfund Insider interviews Emmanuel Marot, LendingRobot CEO.
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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Lending Club’s Stock Price is Not a Leading Indicator for Fintech

Lending-Club-NYSE

Lending Club (LC) will always have a fond place in my heart. Renaud Laplanche’s small team presented at our very first Finovate in 2007. And until a few months ago, they were our most successful startup alum, at least measured by company valuation (Credit Karma gets the nod for now). While LendingClub is still a unicorn (market cap = $1.5 billion today), the loss of 7 or 8 unicorns’ worth of market cap in the past 12 months is unsettling.

I have had little interaction with the company in the past few years as it moved from demoing tech at Finovate to keynoting alt-lending events. But I’ve always been a fan, both of the business model, and also of Laplanche and the company as a whole. I will say this, though, they were one of our more intense alums. But that’s not necessarily a negative. That’s often what it takes to scale in the difficult world of consumer credit where one misstep can sink you (RIP Nextcard).

But they’ve also been willing to give back. Laplanche personally introduced us to a potential strategic partner several years ago. He did it purely as a friendly favor. It was long past the point where he had anything to gain from that introduction.

So, yeah, it’s been hard to watch the s***storm of the past 10 days. I was preoccupied with FinovateSpring during the worst of it last week, but I’ve been soaking up the various articles the past few days. I agree with Peter Renton’s post today: Lending Club must overcome some serious challenges in the short-term. But to say that the marketplace lending model is broken (paywall warning), or to jump to the conclusion of a fundamental flaw in the entire fintech industry is just so much hyperbole.

lc ytd stockFrom what I can discern, Lending Club had a relatively minor disclosure issue. And while LC lost major trust-points (albeit a HUGE issue), it’s important to note there were ZERO financial losses for anyone involved other than shareholders (see inset) and fired LC execs. A single bad consumer loan would produce more financial damage to LC lenders than this whole sordid situation.

What does this mean for the future of P2P lending? Well, it’s bad for LC short-term. But for other players, the situation is mixed. Less volume going through the LC platform means more loan demand for other players. But it’s a two-sided market, and clearly some institutional money is pulling back, so it may be harder to fund loans. That means rates go up, which will spike lender returns, bringing more capital back into the system. Money always flows to the best risk-adjusted return. So marketplace lending survives.

And what does all this mean to the other fintech players? We had 72 demos at FinovateSpring last week. Exactly zero of them are impacted negatively by the LC situation. The primary P2P loan-play, Best of Show winner Lending Robot, is probably helped by volatility. As the “Mint for individual P2P lenders,” that YC alum acts as a front-end to multiple loan platforms (see their demo here).

You could argue that the stock-price decline of Lending Club puts a damper on future fintech IPOs. That is probably true for U.S. consumer lending marketplaces like Prosper (which recently laid off 28% of its workforce, which, remember, had doubled in 2015). But serious investors don’t view fintech as one homogeneous field. Returns from angel investing in Hip Pocket or UBS’s recent investment in SigFig, have no correlation with the stock market return of a single public marketplace lender.

So yes, one high-flyer falls back to earth, but that’s not an indictment of an entire, highly diversified industry.

FinovateSpring 2016 Best of Show Winners Announced

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Heading into FinovateSpring 2016, we knew that one of the big themes would be the use of video for everything from authentication to improving customer engagement. And it seems like the hundreds of votes cast in our FinovateSpring 2016 Best of Show awards saw it the same way. Of the six Best of Show trophies awarded on Wednesday afternoon, two went to companies—SaleMove and Silver6that are helping to make visual technology a bigger part of fintech innovation.

In fact, the more we think about it, the more we see how Best of Show award winner Quid—with its interactive maps that help businesses better navigate big data—is part of this larger trend toward leveraging the visual. Whether to better connect customers and clients with merchants and advisers, or to help make data more accessible and actionable, when it comes to fintech innovation, the “eyes” have it.

Our Best of Show voters were also impressed by the way innovators are using technology to solve the challenges of refugee populations and the underbanked (BanQu); the cash-flow struggles of working families (PayActiv); and even to help middle-class investors better track their finances across peer lending platforms (LendingRobot). This year’s Best of Show vote is real testament to both the diversity and social engagement that defines fintech in 2016. And truth told, it is a beautiful thing to see.

So let’s take a closer look at the award winners for Best of Show at FinovateSpring 2016 (in alphabetic order):

BanQu - true vector copyBanQu for its blockchain-based identity platform that enables financial inclusion and empowers the underbanked to join the global economy.

 

 

LendingRobot copyLendingRobot for its dashboard that helps investors track investments across peer lending platforms like Lending Club and Prosper.

 

PayActiv Logos CMYKPayActiv for its real-world alternative to payday loans that gives workers access to earned but unpaid wages.

 

Quid copyQuid for its web-based intelligence platform that leverages big data analytics, natural language processing, and network science to turn data searches into visual explorations.

 

SaleMoveSaleMove for its engagement platform that creates high-touch customer interactions using video, voice, and chat.

 

Silver6 copySilver6 for its financial video platform that enables businesses to use video personalization to provide custom communications.

 

We hope you enjoyed FinovateSpring 2016. We had a great time hosting this year’s event and are already looking forward to our return to San Jose next year. Many thanks to all those who supported, attended, sponsored, partnered with, and demoed their latest and greatest innovations live on stage. We’ll see you again in 2017!


Notes on methodology:
1. Only audience members NOT associated with demoing companies were eligible to vote. Finovate employees did not vote.
2. Attendees were encouraged to note their favorites during each day. At the end of the last demo, they chose their three favorites.
3. The exact written instructions given to attendees: “Please rate (the companies) on the basis of demo quality and potential impact of the innovation demoed.”
4. The six companies appearing on the highest percentage of submitted ballots were named “Best of Show.”
5. Go here for a list of previous Best of Show winners through 2014. Best of Show winners from FinovateEurope 2015 are here. Best of Show winners from FinovateSpring 2015 are here. Best of Show winners from FinovateFall 2015 are here. Best of Show winners from FinovateEurope 2016 are here.

LendingRobot’s Mobile App is “Mint” for P2P Lending Accounts

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It’s surprising that neither Lending Club nor Prosper have their own official apps* for tracking portfolios. But it’s even more mind-boggling that a third-party hasn’t seized the opportunity to aggregate P2P lending accounts, similar to what Mint did 10 years ago for bank accounts.

LendingRobot, a platform that uses an algorithm to optimize P2P lending investments in Lending Club, Prosper, and Funding Circle, has launched a mobile app to fill the need for the $6.6 billion industry. The free app is available on iOS and Android and while it does not require users to open a LendingRobot account, it does require registration.

Lending Robot’s app will:

  • Track portfolio health across three platforms
  • Monitor loan repayments
  • Compare loans across platforms
  • Track overall performance

LRAppImages

Emmanuel Marot, founder and CEO of the Seattle-based company, explains the move:

The fact that more than 20% of LendingRobot’s traffic is via mobile is, in itself, a great reason to have a mobile app. But the fact that not a single one of the major peer-lending platforms offers a mobile app leaves a lot of room for LendingRobot not only to meet the needs of our customers, but also become a daily part of any investors’ monitoring of their own investments.

LRDEmoLendingRobot debuted its platform, described as a “robo-adviser for P2P lending,” at FinovateSpring 2014. Its algorithm invests clients’s money across different loans, constantly adjusts the portfolio based on loans available, and automatically reinvests dividends. The company will manage up to $5,000 for free and any amount beyond that for 0.45% per year.

Founded in 2012, LendingRobot has 7 employees. It has raised $3 million from Runa Capital and angel investors.

LendingRobot is one of 71 companies to debut their newest technology on stage at FinovateSpring on May 10 & 11. Pick up your ticket to save your seat.


*Both Lending Club and Prosper have mobile-optimized sites, so mobile-account management isn’t completely overlooked. Also, Prosper launched its official mobile app in March, but it is a re-brand of the recently acquired BillGuard app and does not track P2P investment performance.

Finovate Alumni News

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.