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A Trillion Dollar Market
by the People, for the People
How Marketplace Lending Will Remake Banking as We Know It
By Charle...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
$1TRILLION
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Since 2008, The Number of Sub-$250K
Commercial ...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
A Growing Spread That Represents $100B/year In ...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Friends Don’t Let Friends Use Banks
Source: Bai...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Source: Viacom Media Networks
Millennials REALL...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
P2P
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Disintermediated lending
P2P
Disintermediated l...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Marketplace Lending
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Marketplace Lending Could Generate >400 BP
Cost...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Big Opportunity in Front of Us
Source: Federal ...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
M A X I M I
Data, Data, Data
Successful players...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
M A X I M I
Data, Data, Data
Successful players...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Extracting Value from Behavioral Data
$5K $15K
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
M A X I M I
Data, Data, Data
Successful players...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Mining Your Customer Base for Revenue
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Lender Inflows Tell the Story
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
M A X I M I
Data, Data, Data
Successful players...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
A Thicket of Regulation
A (non-exhaustive) list...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
M A X I M I
Data, Data, Data
Successful players...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
The Free Markets Have Spoken
Source: FDIC, data...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
www.foundationcapital.com/marketplace-lending.p...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
Few Major Banks are Becoming More Efficient
Sou...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
“People have long thought that the Internet
is ...
A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelendingA TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE ...
foundationcapital.com/marketplace-lending.php
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P2P Lending Presenation

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P2P Lending Presenation

  1. 1. A Trillion Dollar Market by the People, for the People How Marketplace Lending Will Remake Banking as We Know It By Charles Moldow General Partner, Foundation Capital
  2. 2. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending $1TRILLION
  3. 3. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Since 2008, The Number of Sub-$250K Commercial Loans has Declined Source: FDIC, data for C&I loans <$250K
  4. 4. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending A Growing Spread That Represents $100B/year In Interest Payments to Banks Source: Federal Reserve
  5. 5. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Friends Don’t Let Friends Use Banks Source: Bain & Company, 2012 NPS Survey
  6. 6. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Source: Viacom Media Networks Millennials REALLY Dislike Banks
  7. 7. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
  8. 8. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending P2P
  9. 9. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Disintermediated lending P2P Disintermediated lending
  10. 10. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Marketplace Lending
  11. 11. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Marketplace Lending Could Generate >400 BP Cost Advantage vs Banks Source: Lending Club based on St. Louis Fed, Federal Reserve
  12. 12. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
  13. 13. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Big Opportunity in Front of Us Source: Federal Reserve, SBA, Goldman Sachs, Bloomberg, FRBNY, Mortgage Bankers Association, PEW Center, Forbes, SEC Annual Lending Revenues IN 2013 (US$B)
  14. 14. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending M A X I M I Data, Data, Data Successful players will out-FICO FICO and be fairer than Fair Isaac. M A X I M I I Connections & Liquidity It's not just about matchmaking but also market-making. M A X I M I I I Formidable Barriers Marketplace platforms are neither easy to start nor easy to scale. M A X I M I V Built to Last Marketplace lenders should be built not just to disrupt but to displace.
  15. 15. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending M A X I M I Data, Data, Data Successful players will out-FICO FICO and be fairer than Fair Isaac. M A X I M I I Connections & Liquidity It's not just about matchmaking but also market-making. M A X I M I I I Formidable Barriers Marketplace platforms are neither easy to start nor easy to scale. M A X I M I V Built to Last Marketplace lenders should be built not just to disrupt but to displace.
  16. 16. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Extracting Value from Behavioral Data $5K $15K
  17. 17. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending M A X I M I Data, Data, Data Successful players will out-FICO FICO and be fairer than Fair Isaac. M A X I M I I Connections & Liquidity It's not just about matchmaking but also market-making. M A X I M I I I Formidable Barriers Marketplace platforms are neither easy to start nor easy to scale. M A X I M I V Built to Last Marketplace lenders should be built not just to disrupt but to displace.
  18. 18. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Mining Your Customer Base for Revenue
  19. 19. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Lender Inflows Tell the Story
  20. 20. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending M A X I M I Data, Data, Data Successful players will out-FICO FICO and be fairer than Fair Isaac. M A X I M I I Connections & Liquidity It's not just about matchmaking but also market-making. M A X I M I I I Formidable Barriers Marketplace platforms are neither easy to start nor easy to scale. M A X I M I V Built to Last Marketplace lenders should be built not just to disrupt but to displace.
  21. 21. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending A Thicket of Regulation A (non-exhaustive) list of federal marketplace lender laws • Equal Credit Opportunity Act (ECOA) • Fair Housing Act (FHAct) • Bank Secrecy Act/OFAC • Truth in Lending Act (TILA) • E-Sign Act (FDIC) • Dodd-Frank - Wall Street Reform and Consumer Protection Act • Know Your Customer (KYC) • Fair Debt Collection Practices Act (FDCPA) • Fair Credit Reporting Act (FCRA) • Fair and Accurate Credit Transactions Act (FACTA) • CARD Act (CARD) A (non-exhaustive) list of federal regulatory bodies • Securities and Exchanges Commission (SEC) • Federal Reserve (FED) • Financial Industry Regulation Authority (FINRA) • Office of the Comptroller of the Currency (OCC) • Federal Deposit Insurance Corporation (FDIC) • National Credit Union Administration (NCUA) • Consumer Financial Protection Bureau (CFPB) • Federal Trade Commission (FTC) • Financial Stability Oversight Council (FSOC) • Commodity Futures Trading Commission (CFTC) • Federal Housing Finance Agency (FHFA) And there are state-by-state licensing requirements specific to each asset class and business model. Source: https://www.fas.org/sgp/crs/misc/R43087.pdf
  22. 22. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending M A X I M I Data, Data, Data Successful players will out-FICO FICO and be fairer than Fair Isaac. M A X I M I I Connections & Liquidity It's not just about matchmaking but also market-making. M A X I M I I I Formidable Barriers Marketplace platforms are neither easy to start nor easy to scale. M A X I M I V Built to Last Marketplace lenders should be built not just to disrupt but to displace.
  23. 23. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending The Free Markets Have Spoken Source: FDIC, data for C&I loans <$250K MARKETPLACE VS. FINTECH IN THE MARKET Trading Multiples Marketplace Traditional Fintech Lenders
  24. 24. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending www.foundationcapital.com/marketplace-lending.php
  25. 25. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending Few Major Banks are Becoming More Efficient Source: McKinsey, Thomson Reuters Just 30% of the top 500 global banks improved cost efficiency between 2009-2012 70% stayed the same or became less efficient
  26. 26. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending “People have long thought that the Internet is overhyped. But when you realize that it now has the power to reinvent the multi- trillion banking industry – I argue that it still hasn’t been hyped enough.”
  27. 27. A TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelendingA TRILLION DOLLAR MARKET BY THE PEOPLE, FOR THE PEOPLE #marketplacelending
  28. 28. foundationcapital.com/marketplace-lending.php

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