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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.
Aptys Solutions
Aptys Solutions signed with Banker’s Bank, a top check depositor with the Federal Reserve Link
Backbase
Backbase to host webinar on how to use social media in financial services Link
Betterment
Bill.com
Bill.com is working to improve its mobile offering for small and midsized businesses Link
Boku
Mobile Entertainment explained how Boku will revolutionize pay-by-mobile for digital goods Link
Capital Access Network
CNBC explained how Capital Access Network solves the need to use financial creativity Link
Credit Karma
WiseBread Blog interviewed Credit Karma CEO Link
doxo
Dwolla
edo Interactive
MyBankTracker interviewed edo Interactive COO about its Prewards service Link
Expensify
Slate explained how Expensify will help the ‘frequent flier’ Link
Kabbage
Technorati described how Kabbage works with eBay Link
Lending Club
LendingKarma
Entrepreneur featured LendingKarma as a good tool to use when borrowing money from family or friends Link
Lendio
San Francisco Chronicle reported that Lendio offers funding opportunities for new grads Link
Lodo Software
Lodo Software was described as a startup providing jobs in the “Silicon Prairie” region, a.k.a. Omaha Link
Monitise
Monitise released a report predicting that the majority of consumers will use mobile money services within the next three years Link
Mortgagebot
Mortgagebot reached 1000 clients, one of its goals from the beginning Link
PayDivvy
2MinuteFinanced interviewed PayDivvy about its services Link
PayNearMe
BillShrink examined PayNearMe’s cash payment service Link
peerTransfer
Mass High Tech interviewed Iker Marcaide from peerTransfer about becoming an entrepreneur Link
ProfitStars
ProfitStars announced a new version of Margin Maximizer that’s now available as a hosted solution Link
Robot Dough
2MiniuteFinance toured RobotDough’s demo during interview at Finovate Spring Link
SecondMarket
Smarty Pig
Smarty Pig launched new sharing features, including activity sharing and goal sharing Link
Striata
Striata will host a June 2 webinar for implementing successful ebilling strategies Link
ThreatMetrix
San Francisco Chronicle covered ThreatMetrix’s research around mobile transaction activity Link
TILE Financial
TILE Financial released a Financial Identity Profile to strengthen the connection between advisors and under-30 consumers Link
TradeKing
TradeKing divulged the lineup of its free webinars in June Link
Tyfone
Tyfone won 2010 Asia Pacific Smart Card Association Award for its NFC innovation and implementation Link
Wikinvest
Dow Jones Advisor highlighted Wikinvest as a way to analyze portfolios Link
Wonga
Xero
Zecco
Zopa
Zopa shows how it helps consumers protect against inflation Link
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:
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
Note:
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
Article updated at 2 PM Pacific with quote from one of Zopa’s partner CUs, Affinity Plus.
Zopa’s U.S. social deposit/lending site will be shuttered, just 10 months after its launch (see previous coverage here). The site, which delivered loan applications and CD customers to six credit union partners, apparently was closed by Zopa. At this point the exact reason is unclear (see update below). Zopa blamed the U.S. credit situation and said it wanted to concentrate its efforts in other markets.
Here’s part of the statement from CEO Doug Dolton that appeared on the Zopa forum earlier today (also here’s the official blog entry at Zopa UK):
The facts are: Due to the extremely difficult consumer credit circumstances in the US, we made the decision to focus our ongoing efforts in the UK, Italy and Japan. We have six credit union partners in the US, and we have been working with them to modify our business model to offer our customers the best possible offerings, given the poor credit conditions in the US.
We’re certainly facing unprecedented economic times worldwide right now, but I am pleased to report that our UK and Italian operations are doing better than ever, and I look forward to continuing to develop those marketplaces. I apologise for any confusion regarding our circumstances.
As of this morning, the Zopa US homepage is unchanged, but you can no longer sign up as a new member and all the Learn More links redirect to USA Federal Credit Union.
Implications
It’s surprising that the company would throw in the towel on the significant investment it made here. However, if Zopa’s CU lending partners had curtailed, or stopped, making loans through the site, something noticed last week by the Prosper Lending Review blog, the whole strategy would no longer be viable (see update below).
But this has nothing to do with what Prosper, Loanio (which launched last week) and hopefully Lending Club (expected be accepting new lenders shortly) are doing with person-to-person lending. Zopa US, unlike Zopa UK, was NOT a P2P lending site, it was a lead-generation site for six credit unions. When those CUs stopped needing loan-leads due to the credit crunch, it took the legs out from under the U.S. division. Even continuing to just take deposits made no sense, since each depositor was required to assist a borrower by gifting a portion of the deposit interest.
We wouldn’t be surprised to see Zopa back in United States in the future as a true P2P lending site, copying the model of its U.K. and Italian divisions. The social aspect of its offering certainly resonated with consumers and industry players as well. The company was one of four Best of Show winners in our April Finovate Startup conference, an award by majority vote from the audience (video here).
For more information, see our Online Banking Report on Person-to-Person Lending. And those attending our Finovate next week will see two companies demo P2P lending.
Update: 2 PM PDT, 9 Oct 2008
As one of the credit unions who were partnered with Zopa, I would like to clarify that we have no credit availability issues and have changed none of our lending practices. This decision was made by Zopa.
— Sarah Mason, SVP, Affinity Plus Credit Union
Now that we are well past the mid-point of 2008, it’s a good time to look at where we are with one of the most talked-about online financial subjects of the decade: person-to-person or social lending.
Currently, two U.S. companies are actively originating unsecured, multi-purpose P2P loans (note 1):
In addition, three more P2P lenders appear very close to launching or relaunching:
Lending Club: The company, launched in May 2007, has been essentially closed to new business since March as they retooled loans into securities for regulatory reasons. However, the company is scheduled to present at our Oct. 14 Finovate conference, implying that they will be out of their quiet period by then (previous coverage here; Finovate 2007 video here). Finally, several companies are looking to launch P2P services in 2008 or 2009, including Globefunder, Community Lend (Canada) and one we just heard about today, Swap-A-Debt.
Forecast revision
Last December we published our second detailed Online Banking Report on Person-to-Person Lending. In that report, we predicted just under $200 million in originations this year. However, due to the inactive period at Lending Club, the delay in Loanio’s launch, and the more conservative approach by Prosper lenders, we are lowering the 2008 forecast by 25%, with an expected total of $135 to $150 million for the year as follows:
P2P lending traffic from Compete (July 2007 through July 2008)
Zopa AdWords ad on “loanio” search
(4 Sep 2008, 1 PM PDT from Seattle IP address)
Landing page (4 Sep 2008, link here)
Notes:
1. Specialists are involved in the student loan piece (GreenNote and Fynanz) along with Virgin Money and Loanback which help with person-to-person loan documentation and servicing.
2. Top-right graphic from April 2008 ABC News segment on Lending Club and person-to-person lending.
An important part of Finovate Conferences, at least for the winners, is the voting process for best demo. All non-presenting attendees receive a ballot which allows them to rate each demo on a scale of one to seven. At the end of the final demo sessions, the ballots are tallied and the presenters ranked 1 through 40 based on the average score. A majority of attendees complete a ballot so it's a good indicator of the group consensus.
There were dozens of awesome demos to choose from, but the peoples' choice yesterday are shown below (in alphabetic order). Congratulations!
Videos of all the demos will be available soon at the FinovateStartup website.
Looking at February's Compete data, estimated traffic (see comment 3) at the three major U.S. person-to-person lenders grew by approximately 100,000 unique users compared to January, a 16% gain. Prosper still dominates the category with nearly 10 times as many unique visitors as its nearest rival, Lending Club.
Update: In terms of funded loans, Prosper had double the volume of Lending Club in February: $6.0 million vs. $2.9 million. In January, the volume was $7.2 million vs. $2.8 million.
| Lender | Launch | Feb. 2008 | Jan. 2008 | Mo. Growth | % Growth | Feb. 2007 |
| Prosper | Feb '06 | 650,000 | 570,000 | +80,000 | 14% | 650,000 |
| Lending Club | May '07 | 70,000 | 50,000 | +20,000 | 40% | * |
| Zopa.com | Dec '07 | 16,000 | 14,000 | +2,000 | 14% | * |
| Total | 740,000 | 630,000 | +100,000 | 16% | 650,000 |
Source: Compete.com, estimated unique site visitors during Feb. 2008 *Not launched
In researching our latest report on P2P lending, we visited the websites of Zopa's six credit union partners to see how they were promoting, and explaining, the relatively complicated new product. Overall, they gave Zopa surprising prominence. Five of the six mention it on their homepages, with three of those running large banners, usually in rotation with other offers (see list below as observed on Dec. 6). USA Federal Credit Union is the lone holdout, with no mention of Zopa on its website so far.
Analysis
I understand why the credit unions are featuring their Zopa relationship. It's new, it's different, it's exciting and the helping-others message fits right in with the holiday spirit. However, for the most part, the program is woefully under-explained when clicking through the banners. I have to believe the most common member reaction to seeing the Zopa product info is, "Huh?"
It must lead to some interesting conversations on the phone and in the branch. Some of which may result in sales, so it's not all bad. But I don't think the ultimate purpose of partnering with Zopa is to confuse members to the extent that they call. There are easier ways to do that.
Examples
First Tech CU has two images on its homepage, both emphasizing Zopa's core message of helping. And the educational aspect is helpful (see screenshot below).
Addison Avenue CU takes a light-hearted approach on its homepage ad, saying:
Introducing Zopa (And no, it isn't a new energy drink)
And Addison Avenue does the best job explaining the service, although I still think it raises more questions than it answers.
