Out of the Inbox: Credit Karma’s Monthly Email is Hard to Ignore

image I get dozens of newsletters and marketing pitches from my various financial accounts every month. While they are interesting to me as an analyst, for the average consumer there’s rarely any actionable information.

However, one financial company consistently drives users to its site month over month with their email missives. And they don’t even have to change the creative.

Free-credit-score provider Credit Karma simply reminds users that it’s been more than two weeks since they last checked their credit score. The company goes on to encourage users to check in every month to to make sure no adverse changes have occurred (see first screenshot below). It’s a simple yet powerful message that drives traffic to the company’s ad-supported site (see second and third screenshots).

I’ve received this message on the 16th of each month this year, except May, when I must have already visited Credit Karma in the two weeks prior. A large yellow button invites the reader to click through to see the latest score (see first screenshot).

And the technique seems to be working. Traffic, measured in unique visitors by Compete, is up six-fold in the past 12 months, to 310,000 visitors in July (see chart below).


Credit Karma email (received 16 July 2009; 10:05 AM Pacific)
Subject: Credit Karma update image

Current landing page after clicking “update” button in email (13 Aug 2009)
Note: Virgin Money’s friends-and-family mortgage offering is the lead product placement while The Easy Loan Site has the top banner. Lending Club is also running a banner across the top.


Landing page two months ago (16 June 2009)
Note: Virgin Money’s friends and family was also the lead product placement, while ING Direct’s Sharebuilder had the banner.  Virgin Money also has a product offer in the middle of the page.


Note: For more info on the market for credit scores and monitoring see our Online Banking Report on Credit Report Monitoring (published Aug 2007).

Virgin Money Joins UnCrunch America

image UnCrunch America, the peer-to-peer lending educational/marketing campaign spearheaded by Lending Club (note 1) got a big boost with the addition of Virgin Money USA.

Not only does Virgin brings its considerable brand recognition, it legitimizes the effort as a true cooperative project, and adds a huge new category to the site, home loans. Plus, they get a much bigger number to put on the top of the homepage (below): $74 million instead of $1 million.

Other financial services participants include: Credit Karma (note 1), On Deck Capital and Geezeo. The campaign has its official launch today, although the website has been active since December (previous post).

The timing of the UnCrunch launch is perfect, following President Obama’s assertion last night that lending was the “lifeblood” of the economy. All active lenders, especially credit unions, should consider joining this effort or using similar themes in their marketing.

UnCrunch home page (25 Feb 2009)


Virgin Money UnCrunch landing page
(link, 25 Feb 2009)


1. Lending Club and Credit Karma will be participating in our upcoming Finovate Startup conference April 28 (see full lineup here).
2. For more info on the market, see our Online Banking Report on P2P Lending.

Out of the Inbox: Virgin Money’s Thanksgiving Fundraiser "Pass the Thanks"

image While the SmartMoney example below is simple and inexpensive, it won’t win any marketing awards or new customers. Virgin Money USA, on the other hand, could do both with its clever Thanksgiving email (sent the Friday before) to registered users (see below).

The message from Virgin has a dual purpose:

  1. Holiday well wishes if you simply read the header or glance at the message
  2. Viral fundraiser and user-generated content device if you follow the link labeled, click the sauce to pass the thanks

Sauce clickers are sent to a landing page (see second screenshot below) that encourages them to send their own Thanksgiving greeting to friends. The greeting includes a short message superimposed on an uploaded picture. The company donates $1 to Give a Drop for every message sent and posted 200 of the well wishes on a Picasa Web-album page (here) which are streamed back to the original microsite (second screenshot).

And of course, it wouldn’t be a Virgin production without an irreverent component. Users can choose whether their cranberry sauce is canned (pictured) or homemade.

The Pass the Thanks campaign was also featured on the company’s homepage during the Thanksgiving time period (see third screenshot below).

Grade: A+ for simultaneously engaging customers, doing good, and creating a viral marketing message

Virgin Money USA Thanksgiving email message (21 Nov 2008)


Virgin Money USA Thanksgiving landing page (link, 2 Dec 2008)


Virgin Money USA homepage (2 Dec 2008)


1. For more on Virgin Money and peer-to-peer lending, see our Online Banking Report on P2P Lending

Peer-to-Peer Lending Volumes Worldwide

image Industry blog, P2P-banking.com recently compiled a list of peer-to-peer  loan volumes from around the world. The chart is reprinted by permission below.

These numbers are cumulative, all-time volumes since inception. More than half is from Virgin Money USA which has helped individuals put $370 million in loans together since it began as Circle Lending in 2001.

Because these companies don't all use the same model, I've revised the tables somewhat, excluding: 

  • Facilitators: My definition of peer-to-peer lending excludes Virgin Money and Loanback because they do not serve as matchmakers (note 1). They do play a crucial role in putting a legal framework in place for friends-and-family loans and often end up servicing the loans as well. They are more like PayPal where Prosper/Lending Club are like eBay.
  • Microfinance markets: I would exclude Kiva as well. It's an awesome platform that allows U.S. citizens to loan money to third-world merchants at zero interest. A powerful tool for philanthropy, yes, but not really peer-to-peer. The same goes for MyC4 and Microplace.

So excluding the above companies, total worldwide originations are $262 million, with two-thirds of that from Prosper.

Here are the market shares of the 8 true P2P lenders that have originated more than $1 million since launch:

Company US$ (mil) WW Share
Prosper (US) $178 68%
Zopa (UK) $39 15%
Lending Club (US) $20 8%
Money Auction (Korea) $7.8 3%
Smava (Germany) $5.8 2%
Zopa (Italy) $4.3 2%
Boober (Netherlands) $3.1 1%
Other $4.5 2%
Total $262 100%



Source: P2P-Banking.com, 28 Oct 2008

1. This does not mean I dislike Virgin Money's business model, just that its loan volume is not comparable to the others on the list.

2. For more info on the P2P lending market, see our Online Banking Report on Person-to-Person Lending

Virgin Money’s Student Payback Could be the Beginning of Something Disruptive

image After talking to founder Asheesh Advani on several occasions, we expect Virgin Money (US) to become a disruptive force in the student loan business. And with college costs rising and financing options declining (see previous coverage here), there’s a need now for new approaches.

Against that backdrop, I was thrilled to see a link to Virgin Money’s press release (here) in a Payments News roundup this morning. I eagerly fired up the blog editor to write about it, but quickly realized it was not the product I was hoping for.

image While it’s a good line extension, it’s not so new (think Diet Coke adding lime). Student Payback is a well-named service to formalize friends & family loans to students, something the company already did with its Handshake and Handshake Plus services (see note 1).

The main difference, and why it costs $100 more, is that Student Payback allows up to 10 increases in the original loan amount with no additional fee. For example, each semester a new loan can be added without needing a new loan doc each time.

Strategically, Student Payback appears to be right on the money. It allows VM to better target the P2P student loan market with the eventual goal of moving upstream, graduating from merely formalizing existing loan agreements to actually brokering multi-party financing deals. For example, initial seed money could come from mom and dad with help from government/school programs. Then as the student progresses through their studies, additional financing could come from Virgin Money partner bank(s) and/or individuals/organizations with an interest in helping students at particular schools (e.g., alumni) or those entering certain fields. Scholarships, grants, internships and other related activities could also be thrown into the mix.

Anyway, there’s lots of opportunity especially with the growth of social networking and the exit of several large student lenders. Two startups showed new solutions at our Finovate Startup conference several weeks ago: GreenNote and SimpleTuition. And there are others entering the market such as Fynanz (previous post here) and Qifang, a Chinese startup TechCrunch wrote about in February (here).

1. See our Online Banking Report on P2P lending for more information.

Ask the CEO: Asheesh Advani of Virgin Money

image Next week, I'll be interviewing Virgin Money USA CEO and Founder Asheesh Advani on stage at the Online Innovations in Financial Service Marketing Conference hosted by the Net.Finance (World Business Research) folks in New York City. Our main topic will be "Why consumers aren't buying mortgages online, yet," but I'm sure we'll cover the entire person-to-person lending spectrum in our 35-minute session Thursday morning (24 Jan).

If anyone has any questions for Mr. Advani, leave them in the comments here, or email me. I'll post the response here next week.

New Online Banking Report Published: Person-to-Person Lending 2.0

For much of the past four or five weeks I've been researching and testing person-to-person lending sites. I've become a lender and have gone through the borrowing process at all three major U.S. P2P lending exchanges: Prosper, Zopa, and Lending Club. Plus I set up friends and family with loans at Virgin Money USA and LoanBack.

It was all part of the research process for the latest Online Banking Report entitled, Person-to-Person Lending 2.0: Disruptive service or market niche? That report is now available at our main website (here).*  

I had originally intended on publishing it in early December. But as I was trying to wrap things up, Zopa launched its new U.S unit. So I stopped the presses and added an analysis of its unique model. Then as I was finishing that, Lending Club made a significant change last week, becoming a national lender instead of state-sanctioned one. That too is now in the report. 

Here's a summary of the major fourth quarter activity in the person-to-person lending sector:

  • Oct. 2: Prosper overhauled a number of its lending tools, which were announced at our FINOVATE conference Oct. 2 (video here
  • Oct. 6: Virgin Money (formerly CircleLending) launched its revamped friends-and-family service with a splashy debut in Boston with Virgin founder Richard Branson leading the parade (coverage here)
  • Dec. 3: Zopa launched its U.S. version, an entirely new way of looking at the P2P space (coverage here)
  • Dec. 13: Lending Club went national in a unique partnership with WebBank


*Subscribers may download the report free of charge.
Others may purchase it as an individual report.

Virgin Money P2P Lending on the Cover of Fortune Small Business

Jeff Bezos may have grabbed the cover of Newsweek for the latest high-tech gadget, the Amazon Kindle, but that's old hat for him. The bigger news in online banking circles is Richard Branson gracing the cover of the December/January issue of Fortune Small Business (click on the inset to read the magazine online). His smiling mug is shown tossing hundred-dollar bills out of a teller cage. 

The reason: Virgin Money USA (previously Circle Lending) is one of six new products/services the magazine included in its annual "The Next Little Thing for 2008" series. To be part of the article, the innovation must be coming from a "small business," although I'm not sure Virgin qualifies as small anymore.

The 1.5 page story discusses the Business Builder "friends and family" loans that Virgin will administer for a one-time cost of $199 to $299 plus $9 per payment. The company says it plans to offer a business loan product later in 2008 or 2009 that will match outside money to the original friends and family loan, provided it's been paid on time. 

Could 2008 be the year of person-to-person lending? Given Branson's track record, there's a good chance the relatively unknown service will take off next year.   


1. According to my recollection. 

Virgin Money USA Launches in Boston/NYC Today

Link to Virgin Money USA Ever since Virgin bought CircleLending for $50 million earlier this year (previous coverage here), I've been looking forward to its launch. We hoped they might launch at our FINOVATE conference two weeks ago, but we lost out to the Mortgage Banker's Association's 94th Annual Conference in Boston, where Sir Richard Branson delivered the opening keynote a few hours ago. 

According to today's NY Times, Sir Richard himself will hand out red "dollars" today in Boston's Copley Square while mere mortals will be doing the same in Manhattan. 

We now have answers to several questions about the new venture:

  1. Will Circle Lending's product, person-to-person loan administration and servicing, live on?
    Answer: Yes, in fact it looks identical, but with much more marketing pizzazz.
  2. Will the Circle Lending product be extended into a person-to-person loan marketplace like Prosper and LendingClub?
    Answer: Not yet, but I still expect that to happen.
  3. Will Virgin Money use person-to-person lending as an entry point for a full line of financial services?
    Answer: Not yet, but there has to be more coming.  
  4. Will Virgin Money bring the hip U.K. direct-banking vibe to the United States?
    Answer: Yes, the website is very progressive by U.S. banking standards (see screenshot below). I haven't seen any other media efforts yet. However, the current homepage design is marred by an annoying Flash display that is a real turnoff even on a broadband connection. Once you get off the homepage, the rest of the website is excellent.

According to today's Boston Globe, the company currently employs 30 in Waltham, Mass., a headcount that will double the over the next year as it introduces more services. The only new service disclosed so far is student loans, an obvious fit with the friends and family real estate, business, and personal loans offered today. We'll be following Virgin Money USA closely and will include an in-depth analysis in an upcoming Online Banking Report on person-to-person lending (2006 report is here).

Virgin Money USA homepage (15 Oct 2007)

Virgin Money US homepage

 Goodbye page at CircleLending.com (15 Oct 2007)

Circle Lending referral page to Virgin Money USA

Virgin Money to Enter U.S. Market Through Acquisition of CircleLending

This is a very interesting bit of news today. Virgin Group PLC, the high-flying UK-based company run by Richard Branson, says it will be using Waltham, MA-based CircleLending to enter the U.S. financial services market. Virgin's financial services are marketed under the Virgin Money brand in the UK (see screenshot below) and several other markets.

If you take a broad view, CircleLending was the first pure peer-to-peer lender in the U.S., five years before Prosper got its start (see previous coverage here). However, CircleLending has historically limited its involvement to servicing loans made between family members, not brokering the deals or vetting the applicants like Prosper and Zopa.

However, from the sounds of it, that will be changing under the new majority ownership by Virgin USA. According to Asheesh Advani, CEO/Founder of CircleLending:

"(CircleLending will be the) launching pad to brand Virgin in the U.S. in financial services"

According to the American Banker article here, the new venture's first product, sold under the Virgin name, will be a direct mortgage that blends "friends and family" funds with capital from a financial institution and/or the secondary market. They also said they will have a credit card and are looking at student loans.

It will be interesting to see how they use peer-to-peer finance in its efforts. Anthony Marino, Virgin USA's SVP Corporate Development told American Banker:

"(the CircleLending platform) provides a broad opportunity to address consumer needs, and the Virgin brand allows us to bring a unique tone of voice to the market,"


"We are … building a major, Virgin-branded financial services company in the U.S."

These are not new concepts, but with the Virgin marketing muscle behind them and the integration of peer-to-peer tools, the newcomer could carve out a significant niche in the massive U.S. mortgage lending business. The new entity could also leverage the CircleLending platform to compete directly with Prosper and Zopa in the U.S. and  importing the resulting product into the UK to compete with Zopa there.

Virgin Money UK homepage