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Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
Symfonie P2P Ltd - Capital Raise
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Symfonie P2P Ltd - Capital Raise

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Symfonie P2P - building a P2P lending platform in Central Europe.

Symfonie P2P - building a P2P lending platform in Central Europe.

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  • 1. Symfonie P2P, LTD 30 March 2014 - Proprietary and Confidential – London: 16 High Holborn, London WC1V 6BX  Prague: Klimentska 1216 / 46, 110 00 T: +44 20 8616 7311 F: +44 20 8616 7499 T: +420 724 260 952 F: +420 222 191 200 This publication has been prepared by Symfonie Capital, LLC (Symfonie) for information purposes only. It is not an offer or solicitation for the purchase or sale of any financial instrument. The publication and its contents are subject to changes. The timing and substance of any changes are at the sole and absolute discretion of Symfonie. Symfonie bears any obligation nor makes any commitment to inform any person of changes made. Investors should not rely on this document in the course of making any investment decisions and neither Symfonie Capital bear no responsibility for the decision of any person to rely on this document in whole or in part. Reasonable care has been taken to ensure that the information contained herein is not untrue or misleading, but no representation is made as to its accuracy or completeness. This document is confidential and proprietary to Symfonie. Transmission or publication of this document without the express prior consent of Symfonie is strictly prohibited. Symfonie Capital reserves all legal rights in connection with the publication of this document. © Symfonie Capital, 2013.
  • 2. Contacts Symfonie Capital Michael Sonenshine Tel: (London) +44 20 8616 7311 (Prague) + 420 222 191 008 msonenshine@symfoniecapital.com
  • 3. Window of Opportunity Symfonie aims to build a profitable Peer to Peer finance business that provides consumers and businesses a convenient way to borrow at competitive rates and offers investors the opportunity to earn significant higher rates of interest than they earn on classical term deposits. Peer to Peer finance entails the provision of an internet platform that functions as a marketplace where borrowers and savers can meet. The internet platform does not constitute provision of loans. Rather, it is a fee based financial service. In addition to matching borrowers and savers the internet platform will enable companies seeking finance to present their businesses to investors looking for investment opportunities. The platform’s business revenues will come from listing and advisory fees paid by businesses and investors Focus on Central Europe Relatively fast economic growth Efficient banking systems Increasing internet penetration Open market access to credit providers Wide gap between borrowing and lending rates Legal protections for creditors High growth market segments Consumers – increasing ability and willingness to borrow SME – growing business sector, under-served due to tightening credit requirements among banks
  • 4. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 4 Winning Strategy for P2P Business Innovate - develop products that are more attractive than what is available in traditional distribution channels Refinance – help credit worthy borrowers refinance high interest rate loans Find underserved segments - reach borrowers who do not meet threshold requirements in the banking sector, yet who are credit worthy Leverage core competence in credit - segment borrowers into risk bands and work with them to manage their borrowing needs Restructure and recover - finding restructuring and recovery solutions that address lenders’ ultimate goal of generating a favorable return/risk ratio Develop scale and scope - address the needs of a wide range of borrowers Cross Sell – identify other financial products that can be sold to the customer base Regional expansion – export good systems and practices to enter other markets Develop alliances – create synergies by identifying good providers in other markets and broadening platform access
  • 5. Business Plan Overview Base Model in GBP Model Drivers Y1 Y2 Y3 Y4 Y5 Y6 Y7 Deals Closed 2,660                      10,620                  23,400                  36,300                   49,200                  63,600                  78,000                  Loans value originated 4,079,755              16,288,344          35,889,571          55,674,847           75,460,123          97,546,012          119,631,902        Year End Outstanding Loans 3,742,162              16,946,484          42,041,423          72,629,300           104,742,531        138,678,932        174,073,015        Total Year‐End Headcount 8                             14                         25                         34                         46                         57                         70                          Revenues Y1 Y2 Y3 Y4 Y5 Y6 Y7 Origination Fees 122,393                  488,650                1,076,687            1,670,245             2,263,804            2,263,804            2,926,380            Loan Servicing Fees 8,928                      79,500                  270,965                613,957                 1,041,300            1,512,599            1,994,478            PPI Fees 4,464                      39,750                  135,483                306,979                 520,650                756,299                997,239                Total Revenues 135,785                 607,900               1,483,135            2,591,182             3,825,753            5,195,278            6,580,675            Net Income Y1 Y2 Y3 Y4 Y5 Y6 Y7 EBITDA ‐333,675 ‐119,416 412,458 919,765 1,599,673 2,349,059 3,090,450 Corporate tax ‐73,408 ‐26,272 90,741 202,348 351,928 516,793 679,899 Net profit ‐260,266 ‐93,144 321,717 717,417 1,247,745 1,832,266 2,410,551 Data are based on the current business plan and are subject to change.
  • 6. Milestones Seed capital - Done. The company was seeded with a GBP 100,000 from the founders and Symfonie Angel Venture Fund, LP Management team – Done. The company recruited a team of highly experienced professionals to execute the strategy. Platform Development – Operating software has been purchased and is being customised to support operations in EUR/USD/GBP/CZK/PLN. Credit Models – Credit scorecards for Consumer and SME loans are in development and being back tested against live data. We will have proprietary models and in addition we are contracting with Experian for expert scoring models. Capital Raise – In process. The Company is raising GBP 150,000. This will see us through launch of commercial operations. Launch of Commercial Operations planned for September 2014.
  • 7. Investor Terms – Round 1 Total Capital Raised Up to GBP 150,000 Total shares sold – 75,000 25% of the Company, post money) Preferred Shares Voting 10% dividend, plus participation in overall company dividend CZK 75 / EUR 2.7 / GBP 2.4 / US$3.8 per share Common Shares Voting CZK 65 / EUR 2.4 / GBP 2 / US$3.1 per share Note: the company’s base currency is pounds, so the price when translated into other currencies is subject to change.
  • 8. Business Opportunity • Central and Eastern Europe is a market of 92 mn people • EUR 877 bn in GDP • Approximately EUR 50 bn in consumer debt • About EUR 600 bn in commercial debt • Debt/GDP in Central and Eastern Europe is about 50% of debt/GDP in Western Europe. • GDP growth is generally higher than in Western Europe while unemployment is generally lower Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 9. Valuation The business is valued with DCF (r=30%) and with an assumed earnings multiple of 15x earnings. Once functioning and developing according to plan the business should have value in the near term of GBP 8 mn. This valuation does not incorporate growth opportunities as the Company expands into Poland and other countries. Source: Symfonie Capital estimates, based on business plan targets.. DCF assumes r=30%. PE 15 assumes 15x earnings multiple. Company Value Over Time - 10 20 30 40 1 2 3 4 5 6 7 Year of Operations GBPmn DCF PE 15 Capital Invested
  • 10. Growth Opportunities SME lending in the Czech Republic Build on success in the Czech Republic to enter Poland and other Central/East European markets Tie to Angel Fund means add-on equity funding platform Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC Source: Symfonie Capital forecasts.
  • 11. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 1111 Peer to Peer Lending Concept • Evaluates borrowers and assigns a risk score • Approves or rejects borrowers • Verifies borrower data • Posts borrower demand to website • Matches lenders and borrowers • Payment processing and loan servicing Peer to peer lending uses internet technology to create a marketplace of borrowers and lenders. • Lenders earn higher rates of interest than they could earn on bank deposits. • Lenders can diversify across many borrowers. • The concept works for consumer loans and business loans. • Borrowers save money by borrowing at rates less than what they would pay to banks and finance companies. Lenders /Investors P2P Internet Service Borrowers
  • 12. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 1212 Intermediation Contractual Structure • Intermediation contract with borrower and lender • Loan servicing contract with lenders • Power of attorney to restructure loans under certain conditions • Take-over of loans in default for more than certain period of time • Processing payments among lenders and borrowers • Implementation of legal loan recovery process • Contract on intermediation signed with P2P provider • Loan servicing agreement with P2P service provider • Structured notes with terms passing through interest and credit risk of the underlying loan • Intermediation contract with P2P provider • Loan agreement. Lenders /Investors P2P Internet Service Borrowers
  • 13. A Region with Relatively Low Government Debt Source: EU statistics database, Symfonie Capital estimates. Government Debt / GDP 0 30 60 90 120 150 180 G R IT PT IE BE EU FR U K C Y ES D E H U AT M T N L PL SL FI SK D K C Z LV LT SE R O LU BG EE EU Countries Debt/GDP(%) Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 14. Relatively Low Private Debt Stock Private Sector Debt / GDP 0 50 100 150 200 250 300 350 LU IE PT BE D K SE N L ES M T U K FI EU FR AT H U EE IT G R D E SL LV C Z PL SK LT EU Countries Debt/GDP(%) Source: EU statistics database, Symfonie Capital estimates. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 15. Convergence Continues Czech Republic offers relatively strong growth and a generally healthier consumer than most other peer countries in new Europe. - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 EU 27Euro 17France ItalyG erm any United Kingdom SpainPortugal Czech RepublicPolandHungaryRom aniaBulgariaSlovakiaEstonia GDP/CapitainEuro 2003 2012 Source: EU statistics database, Symfonie Capital estimates. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 16. Convergence Continues In Central and Eastern Europe consumer loans/capita is about 35% of the figure in Western Europe Source: EU statistics database, Symfonie Capital estimates. 0 500 1000 1500 2000 2500 3000 3500 Loans/C apitaEU 27Euro 17France ItalyG erm any United Kingdom SpainPortugal Czech RepublicPolandHungaryRom aniaBulgariaSlovakiaEstonia ConsumerDebt/Capita(EURO) 2003 2012
  • 17. Czech Consumer Debt is Relatively Low Consumer lending in the Czech Republic is relatively low compared to Europe generally Source: EU statistics database, Symfonie Capital estimates. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% EU 27Euro 17France ItalyG erm any United Kingdom SpainPortugal Czech RepublicPolandHungaryRom aniaBulgariaSlovakiaEstonia ConsumerLending/GDP(%) 2003 2012 Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 18. Czech Republic is Strategically Well Located The Czech Republic offers a EURO 8 bn consumer finance market and borders on Poland, the region’s largest market Source: EU statistics database, Symfonie Capital estimates. - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Portugal Czech Republic Poland Hungary Rom ania Bulgaria Slovakia Estonia ConsumerLending(Euromn) 2003 2012 Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 19. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 19 Bank Consumer Lending – EUR 7.2 Bn Outstanding • Volume of consumer loans at banks is EUR 7.2 bn • Net consumer loan growth at banks has been practically stagnant last several years. Czech Consumer Loans Issued by Banks Source: Czech National Bank, Symfonie Capital estimates. CZK translated into EUR at constant rates. 7.27.27.3 6.8 6.2 5.1 4.0 3.3 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012
  • 20. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 20 Non-Bank Consumer Lending – EUR 1.3 bn annually Czech Consumer Loans Issued by Non-Banks – EUR bn • 931,752 contracts in 2012 • loans taken in 2012: EUR 1.3 bn • 2 mn active contracts: EUR 2.2 bn • 374,300 contracts in 2012 for personal loans: EUR 400 mn • 204,470 revolving loans: in 2012 EUR 455 mn • 352,031 point of sale loans in 2012: EUR 386 mn Source: Czech Leasing and Finance Association (www.clfa.cz). CZK translated into EUR at constant rates. 1.3 1.4 1.5 2.0 1.8 1.3 1.2 0.9 1.3 - 0.5 1.0 1.5 2.0 2.5 2004 2005 2006 2007 2008 2009 2010 2011 2012
  • 21. Polish Consumer Loans – EUR 30 bn Outstanding Polish Consumer Loans 31.5 31.9 31.0 29.4 - 10.0 20.0 30.0 40.0 2009 2010 2011 2012 EURBn Source: National Bank of Poland and Symfonie Capital Estimates. PLN translated into EUR at constant rates.
  • 22. Bank Loans to Czech Businesses – EUR 5.7 bn Source: Czech National Bank, Symfonie Capital estimates. CZK translated into EUR at constant rates. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC Czech Business Loans 1-5 Years 6.2 6.5 5.9 5.6 4.9 4.2 3.7 3.7 5.4 5.8 5.7 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CAGR 9.6% p.a.
  • 23. Non-banking Sector Loans to Czech Businesses – EUR 1.2 bn Source: Czech Leasing and Finance Association (www.clfa.cz). CZK translated into EUR at constant rates. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC Non-Banking Sector Loans to Czech Businesses 0.94 0.69 0.44 0.21 0.150.14 0.080.07 0.99 1.00 1.12 1.21 0.0 0.5 1.0 1.5 2.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 EURbn
  • 24. Lending to Polish SME Sector - EUR 40 bn Source: National Bank of Poland and Symfonie Capital estimates. PLN translated into EUR at constant rates. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 39.3 37.9 30.230.3 - 10.0 20.0 30.0 40.0 2009 2010 2011 2012 EURBn
  • 25. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 25 Interest Rates Provide Opportunity for P2P 0 2 4 6 8 10 12 14 16 2005 2006 2007 2008 2009 2010 2011 2012 Rates(%) Consumer Loan Rates Deposit Rates r • Czech bank rates on consumer loans are about 14% while deposit rates are less than 2%. Source: Czech National Bank, Symfonie Capital estimates.
  • 26. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 26 Interest Rates Provide Opportunity for P2P • Polish deposit rates are less than 5% while base consumer lending rates are more than 15% Source: National Bank of Poland, Symfonie Capital estimates. 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2009 2010 2011 2012 Rates(%) Consumer Loan Rates Deposit Rates Consumer RSPN (%)
  • 27. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 27 Why Borrow???? Source: CLFA - www.clfa.cz, Czech National Bank www.cnb.cz, National Bank of Poland and Symfonie Capital estimates. CZK and PLN translated into EUR at constant rates. • Non-banking - about 33% are for used cars. • Non-banking - about 33% are revolving loans • Non-banking - about 33% general consumer purchases • Non-banking – average loan size is about EUR 1,500 • Banking – about 20% is revolving credit • Banking – about 75% is for consumer purchases • Used car market in Czech Republic is about EUR 550 mn annually and about EUR 3 bn annually in Poland Leading Non-bank Consumer Finance Companies – Outanding Loans (EUR bn) CETELEM ČR, a.s. 0.38 Home Credit, a.s. 0.32 Provident Financial s.r.o. 0.17 ESSOX, s.r.o. 0.13 ŠkoFIN s.r.o. 0.05 s Autoleasing, a.s. 0.04 GE Money Auto, s.r.o. 0.04 UniCredit Leasing CZ 0.04 1.17
  • 28. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 28 What’s the Problem???? •Loan rates, especially non-bank loans, are 10-20% •Smaller loans and shorter term loans are much more expensive than bigger loans and longer term loans. •Revolving charge cards are expensive – 20% and higher •Consumer loan pricing is not always transparent – non-interest charges increase loan cost substantially •Many consumer lenders charge clients for early repayment – usually about 1% of the outstanding amount of the loan •Many consumer lenders charge a monthly account fee in addition to the interest rate The window of opportunity is to identify credit worthy clients who are paying high interest rates and re-finance them at same or lower rates with consumer-friendly terms, policies and procedures.
  • 29. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 29 P2P Loan Pricing • Base interest rate – based on credit risk score each borrower is assigned a base interest rate. • Borrowers who continually meet the payment schedule can be credited back interest as a reduction in principal. Late payments are charged over-due fees. • Each borrower carries payment protection insurance. P2P provider earns a commission on the payment protection insurance. • A margin is added to the base and is the fee earned by the P2P loan intermediator. Few lenders offer interest look backs, step-down interest, no-prepayment penalties, flexible credit policies. We can compete by offering borrowers an interesting alternative to classical loans.
  • 30. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 30 Small Loans Present Big Pricing Opportunity Lenders Charge More for Small Loans Than for Large Loans Source: Symfonie Capital research and estimates. 0 10 20 30 40 50 60 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 Size of Loan (EUR) BaseInterestRate(%)
  • 31. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 31 Loan Term Impacts Pricing Lenders Generally Offer Lower Rates for Longer Term Loans Source: Symfonie Capital research and estimates. 0 10 20 30 40 50 60 70 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 Term of Loan (Months) RPSN(%)
  • 32. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 32 Credit Insurance Adds to the Cost Account Fees and Credit Protection Insurance 2-12% to Loan Cost Annually Source: Symfonie Capital research and estimates. 0 2 4 6 8 10 12 14- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 Size of Loan (EUR) AdditonalFees(%)
  • 33. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 33 Total Cost Ranges from 10% - 60% Source: Symfonie Capital research and estimates. 0 10 20 30 40 50 60 70 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 Size of Loan (EUR) RPSN(%)
  • 34. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 34 Credit Protection Insurance Credit Protection Insurance - The Cost of Safety Source: Symfonie Capital research and estimates. Data from Czech lenders. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 368 2,206 4,044 5,882 7,721 9,559 11,397 13,235 15,074 16,912 Loan Size - EUR InsuranceCost(%ofLoan) CS Cetelem Low Cetelem High GE Low GE High
  • 35. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 35 Competitive Edge – Opportunities to Get Market Share Lower costs - pass cost savings on to the borrowers Knowing the client better - understand the borrowers to keep default rates low Data gathering - gather data on customers so and tailor products to meet their needs Size doesn’t matter – Develop a lending model that doesn’t automatically impose higher base interest rates on smaller size loans Flexible - we allow borrowers to easily shorten or lengthen loan tenor Proactive credit management - work with clients to help them manage credit problems before they turn into defaults Choice of flat or declining payment - offer loans with declining monthly payment as an alternative to the traditional flat payment structure Payment holidays - build one or two months per year into the payment calendar where no payment is due Rising payment loans - offer loans that have smaller payments on the front end and larger payments on the back end. Look-back rewards - reward consistent payers with cash-back, credit toward principal balance, step-down interest rates Cross selling - cross sell customers into other financial products besides lending and borrowing Source: Symfonie Capital. The above list is indicative and does not necessarily reflect final product features, terms and conditions.
  • 36. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 36 The Symfonie Advantage COMPETITOR BASE OFFER •Loan amount – EUR 2,574 Interest 17.2% Monthly Payment – EUR 51 •Total Payments - EUR 4,320 and after cash-back for 100% on-time payments, EUR 3,600 – EUR 720 savings SYMFONIE BASE OFFER •Loan amount – EUR 2,574 Interest 17.2% •Monthly Payment – Starts at EUR 68, declines each month….last payment is just EUR 19. •Total Payments - EUR 4,141 Borrower saves nearly EUR 180 vs. Competitor base offer. SYMFONIE REWARDS PROGRAM •Loan amount – EUR 2,574 Interest 17.2%, declines by 100 bp per year •Monthly Payment – Starts at EUR 68 declines each month. •After each 12 monthly on-time payments, 1/3 of the interest is credited back to borrower, reducing the outstanding principal balance •Total Payments - EUR 3,491 Borrower saves nearly EUR 830 AND reduces payment time to 72 months. Source: Symfonie Capital. The above list is indicative and does not necessarily reflect final product features, terms and conditions.
  • 37. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 37 Non-bank Competitors – Loans Originated 2012 • Cetelem – wide product offering, easy repayment options, competitive pricing on payment insurance. RPSN ranges from 11% for larger loans to 19.8% for smaller loans. Growing network of retail distribution partners. Advertised on-line pre-approval in a few minutes. • Home Credit – relatively expensive lender, no offer on payment insurance. RPSN for smaller sized, shorter tenor loans as high as 46%. RPSN on longer tenor and larger terms as little as 11%. Wide point- of-sale network. No on-line application. • Provident – loans 45 - 100 days. Quick approval. 50% interest rate. Mainly for consumers who can’t get credit and are high risk of default. EUR 150 – EUR 3,000. More than 10% of non-bank loans are via Provident. • Symfonie business model looks to develop about EUR 73 mn in annual loan originations in the Czech Republic by year 5, which is about 6% of the current annual tally of personal loans within the non-bank sector and less than 1% of the annual figure for the banking sector. Source: Czech Leasing & Finance Association www.clfa.cz). CZK translated in to EUR at constnat rates. CETELEM ČR, a.s. 0.38 Home Credit, a.s. 0.32 Provident Financial s.r.o. 0.17 ESSOX, s.r.o. 0.13 ŠkoFIN s.r.o. 0.05 s Autoleasing, a.s. 0.04 GE Money Auto, s.r.o. 0.04 UniCredit Leasing CZ 0.04 1.17 Leading Non-bank Consumer Finance Companies – Outanding Loans (EUR bn)
  • 38. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 38 Credit Model Framework Credit score driven by disposable income vs. monthly payment The higher the score, the lower the base interest, irrespective of amount client wants to borrow Source: Symfone Capital. Credit model is illustrative only and does not necessarily reflect the actual credit model employed. 2 3 4 6 8 10 368 0 0 0 0 0 0 551 0 0 0.46 0.64 0.73 0.83 735 0.2 0.45 0.6 0.75 0.85 0.9 919 0.28 0.55 0.69 0.83 0.89 0.93 1,103 0.31 0.58 0.71 0.84 0.92 0.94 1,287 0.36 0.59 0.78 0.87 0.92 0.95 1,471 0.39 0.64 0.78 0.87 0.92 0.96 1,654 0.41 0.64 0.76 0.89 0.93 0.96 1,838 0.43 0.66 0.76 0.87 0.93 0.97 2,022 0.44 0.69 0.77 0.88 0.93 0.97 2,206 0.45 0.69 0.78 0.88 0.94 0.97 2,390 0.47 0.69 0.78 0.88 0.96 0.97 2,574 0.47 0.69 0.78 0.9 0.94 0.97 2,757 0.48 0.68 0.79 0.9 0.94 0.98 2,941 0.48 0.68 0.79 0.91 0.95 0.98 3,125 0.48 0.68 0.79 0.91 0.95 0.98 DISPOSABLE INCOME/MONTHLY PAYMENT DISPOSABLEINCOME(EUR)
  • 39. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 39 P2P Companies - Sources of Lenders  Own Equity – Well capitalised P2P companies may use some of their own capital in order to fill gaps between arrival of borrowers and lenders to the site.  Family Offices – Symfonie believe appetite among family office for relatively secure high yield product is strong. P2P providers with robust operations should enjoy good access to this sector of the lending market.  Alternative Investment Funds –Hedge funds represent about EUR 1.5 trillion in assets, of which about 10% or EUR 150 bn is invested in credit markets.  People – Symfonie expect ample supply of lending capital from the retail market. Bank deposit rates are less than 2%. Household bank deposits in Czech Republic are EUR 80 billion and growing. Household investments in capital markets are EUR 40 bn.  Borrowings – P2P companies borrow to ensure growing demand for loans can be met.
  • 40. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 40 Czech Savings and Investment Base Source: Czech National Bank, Symfonie Capital research and estimates. CZK translated into EUR at constnat rates. 48 53 61 68 71 75 78 80 32 32 35 34 35 35 37 39 - 20 40 60 80 100 120 140 2005 2006 2007 2008 2009 2010 2011 2012 EURBn Bank Deposits Securities & Mutual Funds
  • 41. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 41 Polish Savings and Investment Source: National Bank of Poland, Symfonie Capital research and estimates. PLN translated into EUR at constant rates. 92.3 100.6 113.7 122.9 24.8 28.6 27.4 35.3 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 2009 2010 2011 2012 EURBn Bank Deposits Mutual Funds
  • 42. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 42 Non-Performing Loans Household Loans - Non-Performing 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2005 2006 2007 2008 2009 2010 2011 2012 r  Bank non-performing loans to households have risen to around 6%.  Among unsecured consumer loans the non- performing rate is probably closer to 8%.  Home Credit recently reported about 8.5%.  CNB bank lending survey recently indicated banks charge on average 17% on their relatively risky loans.  Mortgage loans are typically categorized as low risk due to collateralization.. Source: Czech National Bank and Symfonie Capital estimates.
  • 43. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 43 Czech Operation Revenue Targets • The current plan targets issuance of about EUR 4 mn of loans in the first 12 months following launch, rising to an annual volume of EUR 80 mn by the 5th year of operation. • The revenue model assumes an average loan tenor 3 years and an average loan size EUR 2,000 • Origination fees are expected to average 3% of loan, collected up front. A loan servicing fee of 2% of the monthly payment amount, collected over tenor of the loan is expected. Additional fees can come from the sale of payment protection insurance, which reduces loan default risk and benefits borrowers and lenders • The revenue target implies about 4% of the consumer loan market by year 5 Source: Symfonie Capital, There is no assurance the targets will actually be achieved. Actual performance may differ depending on market conditions and product terms and conditions. Revenue model is subject to change. Revenue & Net Profit Model -2 0 2 4 6 8 10 1 2 3 4 5 6 7 Year of Operations EURmn Net Profits Revenues
  • 44. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 44 Expense Model Operating staff, management and marketing are the largest cost items, accounting for nearly 80% of the expense budget. The Company plans to keep marketing costs contained during the first 12 – 18 months after start of operations while it ensures quality control and makes initial product adjustments. Source: Symfonie Capital. The cost model presented is indicative and subject to change without notice. Actual results may differ. Expenses Year 3 Credit check fee Office Rent Office Supplies IT Systems Business admin &  analysis compensation Management  compensation Communication Supervisory Board Accounting Legal Travel Marketing Credit staff  compensation
  • 45. Operating Staff vs. Volumes • Operating staff includes customer service/sales, loan origination, loan administration • Operating principles include classical banking and financial services control procedures • Staffing plans were derived from analysis of planned processes and are generally consistent with what we have observed at other P2P and financial services providers Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC Source: Symfonie Capital. Actual results may differ from forecasts. Operating Staff vs. Volume - 20.0 40.0 60.0 80.0 100.0 1 2 3 4 5 6 7 Year of Operations Deals(000)&Staff Deals Done (thousand) Customer Service & Loan Admin Staff
  • 46. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 46 Incentivising Management & Employees • Management and employees earn ownership in the Company. • Management and employ ownership consists of options to buy shares in the Company, vested over time and with cash payments in exchange for the shares. Vesting begins after 18 months of service and take place over an 18 month period. Managers therefore must work for 36 months in order to become fully vested. • Management buy-in is 23% of the Company on a fully diluted basis. • Management and employees also have an incentive programme and can earn options to buy shares in the Company. The incentive programme begins after three years and is vested over a two year period, so management must stay with the Company for five years in order to be fully vested.
  • 47. Management Incentive Plan Option Plan for Year 4 Earnings 0% 2% 4% 6% 8% 10% 12% 14% 85,985 171,969 257,954 343,938 429,923 515,907 601,892 687,876 773,861 859,845 Year 4 Earnings (EUR) %ofCompanyEarned Option Plan for Year 5 Earnings 0% 2% 4% 6% 8% 10% 12% 14% 149,546 299,092 448,638 598,183 747,729 897,2751,046,8211,196,3671,345,9131,495,459 Year 5 Earnings (EUR) %ofCompanyEarned • Management earns options on company equity depending on profits produced in year 4 and 5 • Option plan is subject to adjustment by the Company’s directors and approval by shareholders
  • 48. Symfonie P2P - Michael Sonenshine – CEO Michael Sonenshine, CFA – Investment Principal Mr. Sonenshine More than 20 years of experience in banking and investment management. He specialises in credit investments. He founded the Symfonie group of companies in 2012. •MT Thaler, Prague/London: CEO/Partner, Head of Research. Investment funds focused on central and eastern Europe and pan-European credit markets •CSFB, London: European High Yield Debt Research •ING Bank, London: European High Yield Debt Research •ING Investment Management, Prague: CEO, Czech Republic •ING Bank, London: Analyst •Driehaus Capital, Prague: Analyst •Evrobank, Prague: Advisor •MBA William Simon School, University of Rochester •B.A., Tufts University Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 49. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 49 Symfonie P2P - Peter McGregor - Chief Operating Officer Mr McGregor oversees all administrative and operational issues for Symfonie in the P2P arena. •More than 25 years experience in banking and operations management •Banco Nacional de Guinea Ecuatorial – Chief Operations Officer •MT Thaler Investment Management, Chief Operations Officer. •ING Bank, Monaco, Budapest, Prague – Wholesale banking and wealth management operations •ABN AMRO, Geneva – private banking operations and product management •PhD, Computer Science, Oxford University, England •BSc (Hons) in Mathematics, Witwatersrand, Johannesburg, South Africa
  • 50. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 50 Symfonie P2P – Stepan Alexa - Chief Technology Officer Mr. Alexa is responsible for the architecture and implementation of the company’s IT solutions. •More than 15 years professional experience in systems development •Implemented database systems in Central and Eastern Europe for T-Mobile, Vodafone and MTS Russia • Sales Director, Oracle, Central and East Europe •MSc, Economics and Computer Science, Prague College of Economics
  • 51. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 51 Symfonie P2P – Jitka Rombova - Chief Financial Officer Ms. Rombova is responsible for overseeing and monitoring the company’s finance. •More than 20 years professional experience in managerial finance and business development •Partner, CQK Invest, providing financial and business support to innovative startup companies •10 years experience in senior management positions in HBO Europe, promoted to CFO •MBA, University of Pittsburgh, Diploma, University of Chemical Technology, Prague
  • 52. Symfonie Advisory Board The Symfonie Advisory Board is a group of highly experienced financial professionals. Symfonie has regular meetings with the Advisory Board to discuss the Fund’s investments, strategy, research on P2P providers. Advisory Board members are independent of Symfonie and do not have legal or regulatory authority or status within Symfonie. Willem Naves Holland •More than 25 years of experience in investment and corporate banking. •Banking advisory projects in Macedonia, Poland, El Salvador and Indonesia •Twenty years experience in credit trading management positions in the ING Group, working in Amsterdam, London and Sao Paolo •Erasmus University degree in Law Pavel Kohout Czech Republic Fifteen years experience in economic analysis and investment management Director of Strategy at Partners Advisors, a leading Czech financial advisory firm Author of several books on economics Member of Czech National Economics Advisory Board Member, Expert Panel of Advisors to Czech Ministry of Finance Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC
  • 53. Appendices
  • 54. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 54 Symfonie P2P Structure SymCredit Czech Republic Operating company in the Czech Republic Symfonie P2P, LTD Source: Symfonie Capital. Shareholding structure assumes all Round 1 and Round 2 investors participate via Symfonie Ventures` Seed investors own Preferred shares preferential rights to dividends to 10% per annum notional dividend (when/if declared), parri-passu with common thereafter. Convertible to common at any time. Seed investment EUR 125,000 - CLOSED Round 1 GBP 600,000 for startup and launch of operations – NOW OPEN SymCredit Poland Operating company in Poland 100 % ownership of operating subsidiaries
  • 55. Shareholding Seed & Round 1 32% Round 2 22% Management earn- in 23% Management incentive 23% • Indicative shareholding structure, post money, assuming all authorised capital sold and issued.
  • 56. Shareholder Value A win-win for management and shareholders Based on 1 mn EUR mn invested, shareholders generate 8X multiple over 5 years Management earn value through buy-in and profit incentives *Value of investors’ shares prior to the first year of operations is equal to the cash invested, assuming all shares sold in Round 1 and 2 are common shares. ** Value of management share prior to the first year of operations is equal to the potential total amount of money management pay for shares acquired through the buy-in and incentive plans. In years 1 to 5 value is based on the full number of shares reserved for the buy-in and incentive plans. In EUR Period End Seed + Round 1 and 2 1 2 3 4 5 Firm Value ‐ DCF ‐                                    5,834,505                      8,272,960                      10,897,972                    13,673,020            16,915,081      Firm Value ‐ 15x P/E ‐                                    ‐                                  ‐                                  5,783,811                      12,897,679            22,431,880      ‐                                  ‐                                ‐                                ‐                                ‐                        ‐                    Authorised number of shares 1,500,000                        1,500,000                      1,500,000                      1,500,000                      1,500,000              1,500,000         Outstanding 800,000                           800,000                         915,500                         1,325,000                      1,500,000              1,500,000         ‐                                    ‐                                  ‐                                  ‐                                  ‐                          ‐                     Shares issued to seed and round 1 and 2 investors 800,000                           800,000                         800,000                         800,000                         800,000                 800,000            Shares issued to management ‐                                  ‐                                115,500                       525,000                       700,000               700,000          Shares reserved for management earn‐in 350,000                           350,000                         234,500                         ‐                                  ‐                          ‐                     Shares reserved for management incentive 350,000                           350,000                         350,000                         175,000                         ‐                          ‐                     Round 1 price per common share 1.7                                    ‐                                  ‐                                  ‐                                  ‐                          ‐                     DCF Per share outstanding ‐                                    7.3                                  8.5                                  9.5                                  9.1                          11                      DCF per share fully diluted ‐                                  3.9                                5.5                                7.3                                9.1                        11                     ‐                                    ‐                                  ‐                                  ‐                                  ‐                          ‐                     15x P/E share outstanding ‐                                    ‐                                  ‐                                  5.0                                  8.6                          15.0                   15x P/E fully diluted ‐                                    ‐                                  ‐                                  3.9                                  8.6                          15.0                   ‐                     Total value of investors' shares* 1,069,813                      3,111,736                    4,412,245                    5,812,252                    7,292,278            9,021,377      Total value of management's shares** 167,794                           2,722,769                      3,860,715                      5,085,720                      6,380,743              7,893,705        Fully diluted shares 1,500,000                      1,500,000                    1,500,000                    1,500,000                    1,500,000            1,500,000      
  • 57. Key Corporate Governance Provisions • New issuance of capital must be approved by at least 75% of outstanding shares. • The business may not incur debt totaling more than 20% of share capital without at least 65% approval of outstanding shares. • The business must payout at least 50% of net earnings as dividends unless at least 75% of shareholders approve otherwise. • Drag provision to incorporated into the statutes. If at least 85% of shareholders agree to sell their shares the other 15% are bound. • Tag provision all shareholders are entitled to participate pro rata in any offer to buy secondary shares.
  • 58. Key Risks • Underperformance - If the business plan is underperforming more capital will be needed. In this case the shareholders will decide whether to authorise additional capital or decrease management incentive pool. • Competition – other P2P operators may enter the markets faster than we do. • Finance – the business is likely to need additional capital to expand into other markets. There is no guarantee capital will be readily available on favourable terms and conditions. • Exit strategy – there is no guarantee the business or the shares will be readily marketable when and exit is desired. • Legislation – adverse legislation may prevent the business from developing or may prohibit the business entirely • New operations – all procedures, policies and systems will be new, untried and untested.
  • 59. Revenue Model Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC EUR Year of Operations Model Drivers Y1 Y2 Y3 Y4 Y5 Y6 Y7 Deals Closed 2,660                      10,620                  23,400                  36,300                   49,200                  63,600                  78,000                  Loans value originated 4,889,706              19,522,059          43,014,706          66,727,941           90,441,176          116,911,765        143,382,353        Year End Outstanding Loans 4,485,091              20,310,859          50,387,882          87,048,352           125,537,004        166,210,778        208,631,628        Total Year‐End Headcount 8                             14                         25                         34                         46                         57                         70                          Revenues Y1 Y2 Y3 Y4 Y5 Y6 Y7 Origination Fees 146,691                  585,662                1,290,441            2,001,838             2,713,235            2,713,235            3,507,353            Loan Servicing Fees 10,700                    95,283                  324,760                735,846                 1,248,028            1,812,894            2,390,441            PPI Fees 5,350                      47,642                  162,380                367,923                 624,014                906,447                1,195,221            Total Revenues 162,742                 728,586               1,777,581            3,105,607             4,585,278            6,226,694            7,887,132           
  • 60. Cost Model Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC Note – Cost model excludes startup costs of EUR 400,000 for purchase of software and establishment of company procedures and processes. In EUR Expenses Y1 Y2 Y3 Y4 Y5 Y6 Y7 Credit staff compensation 76,310                    167,902                409,063                699,288                 1,015,984            1,394,565            1,793,836            Business admin & analysis compens 111,673                  115,023                118,474                122,028                 153,620                163,982                174,828                Management compensation 134,007                  138,028                142,168                297,794                 306,728                315,930                325,408                Total Compensation 321,990                 420,952               669,705               1,119,110             1,476,331            1,874,477            2,294,071            Credit check fee 18,336                    75,404                  171,129                273,433                 381,721                508,248                642,023                Office Rent 15,882                    22,664                  42,826                  65,082                   91,427                  121,021                152,308                Office Supplies 1,489                      4,881                    10,754                  16,682                   22,610                  29,228                  35,846                  Communication 6,618                      9,429                    17,844                  27,358                   38,234                  50,441                  63,741                  IT Systems 42,647                    31,412                  42,986                  47,412                   46,333                  44,722                  59,926                  Marketing 110,294                  275,735                295,823                421,030                 577,237                747,988                899,015                Travel 4,963                      5,112                    5,265                    5,423                     5,586                    5,754                    5,926                    Legal 27,574                    12,868                  13,254                  13,651                   14,061                  14,483                  14,917                  Accounting 3,676                      3,787                    3,900                    4,017                     4,138                    4,262                    4,390                    Supervisory Board 9,191                      9,467                    9,751                    10,043                   10,345                  10,655                  10,975                  Total Other Expenses  240,671                 450,758               613,533               884,132                1,191,692            1,536,801            1,889,066            Total Expenses 562,661                 871,710               1,283,238            2,003,242             2,668,023            3,411,278            4,183,137           
  • 61. Profit Development Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC Net Income Y1 Y2 Y3 Y4 Y5 Y6 Y7 EBITDA ‐399,919 ‐143,124 494,343 1,102,366 1,917,255 2,815,416 3,703,995 Corporate tax ‐87,982 ‐31,487 108,755 242,520 421,796 619,392 814,879 Net profit ‐311,937 ‐111,636 385,587 859,845 1,495,459 2,196,024 2,889,116
  • 62. Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 62 Disclaimer • This document has been prepared by Symfonie Capital Investment Management LLC (“Symfonie Capital”) for persons reasonably believed by Symfonie Capital to be persons of the categories to whom Symfonie Capital are permitted to communicate financial promotions. This document does not constitute or form part of any offer or invitation to sell, or the solicitation of an offer to subscribe or purchase any investment. Symfonie Capital believes that the information it provides is accurate as at the date of publication, but no warranty of its accuracy or completeness is given and no liability in respect of errors or omissions is accepted by Symfonie Capital or any partner or employee of Symfonie Capital. Past performance is not necessarily a guide to future performance. • This presentation is for illustration and discussion purposes only and is not intended to be, neither should it be construed or used as, financial, legal, tax or investment advice nor an offer to sell, nor a solicitation of any offer to buy, an interest in any of the funds managed by Symfonie Capital (the “Funds”). None of the Funds have shares registered under the U.S. Securities Act of 1933, as amended. • This presentation is as of the date indicated and subject to change without notice. • Any indications of interest from prospective investors in response to this material involves no obligation or commitment of any kind. Subscriptions can be made only on the basis of a Confidential Offering Memorandum to qualified investors. The investment objectives and methods summarized in this document represent our current focus and intentions. • There is no assurance that Symfonie Capital or the Company will achieve its objectives. Investors may lose money upto the full value of their investments. No representation is made that the Company will achieve its objectives or that any investor will or is likely to achieve results comparable to any that may be shown. There can be no assurance that any investor will make any profit at all or will be able to avoid incurring substantial losses. Past performance is no guarantee of future results. • This presentation does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it. Before making any investment, you should thoroughly review the the Company’s Confidential Offering Memorandum with your financial and tax advisor to determine whether an investment in the Company is suitable for you in light of your financial situation. • This presentation is subject to revision and updating. Certain information has been provided by third-party sources and, although believed to be reliable, it has not been independently verified and its accuracy or completeness cannot be guaranteed. This presentation is confidential, is intended only for the person to whom it has been delivered and under no circumstance may a copy be shown, copied, transmitted, or otherwise given to any person other than the authorized recipient. Symfonie Capital is solely responsible for the content herein.

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