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ARE YOU AN
ECOMMERCE PLATFORM
OR A SMB LENDER?
the future of finance when everyone is a lender
FUNDING FOR LENDING STARTUPS EXPLODING
WHY?
NEW COMPETITION FROM OUTSIDE TRADITIONAL FINANCE
LOTS OF MONEY AND OPPORTUNITY UP FOR GRABS
BUT SMBS
AREN’T
BORROWING
JUST FROM
BANKS
they’re borrowing from a new
class of lenders
ECOMMERCE LENDING
TRANSACTIONS AND FINANCING
AMAZON LENDING
➤ Invite only, began in 2012
➤ 90 - 180 day loans of $1k to
$600k
➤ 6% - 14% interest rates
➤ Since incepti...
PAYPAL
➤ Fall 2015 announced it had
surpassed $1 billion in SMB loans
after 2 years
➤ 60,000 merchants have used
PayPal’s ...
LENDERS TARGET SHOPIFY MERCHANTS
➤ Kabbage provides loans to
Shopify merchants
➤ Affirm, Max Levchin’s new
online lender, ...
THE CHINESE
ECOMMERCE/BANKING
EXPERIMENT
TENCENT/WEBANK
➤ Tencent, one of top Internet
companies in China, launched
January 2015 first private online
bank in China...
ALIBABA/MYBANK
➤ Alibaba bank affiliate, Ant
Financial launched MYbank
Summer of 2015
➤ Registered capital of 4 billion
yu...
BAIDU
➤ China’s Google has partnered
with Citic Bank to launch an
online bank
➤ Baidu has 640 million users
and Citic Bank...
UNSECURED
LENDING
getting better at assessing risk
with additional ecommerce data
KABBAGE
➤ Recently raised $135M + credit facility of $900M
➤ Funded over $1 billion to 100,000+ small businesses
➤ Loan ap...
Both balance sheet lenders (OnDeck) and marketplace lenders (Funding Circle and
Lending Club) are going after the SMB mark...
SECURED
LENDING
Securing collateral behind
online lending
BORRO
➤ loans of up to $10,000,000
secured against luxury assets
such as fine art, antiques,
jewelry, luxury watches,
pres...
FACTORING/
INVOICE
FINANCE
Providing financing for
specific purchases
EXAMPLES (BEHALF, BLUEVINE, C2FO, FUNDBOX )
➤ 82% of business failures are
due to poor cash management
➤ In the United Sta...
KICKFURTHER
➤ SMBs finance inventory to the crowd at a consigned rate. If
funding goal is met, Kickfurther buys the invent...
“People have long thought that the Internet is
overhyped. But when you realize that it now has
the power to reinvent the m...
www.tradestreaming.com
Future of finance: When everyone is an online lender
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Future of finance: When everyone is an online lender

There's a bull market in online lending and beyond pureplay startups like Lending Club, Prosper, and Funding Circle showing explosive growth, other players are jumping into the fray. Some of these players are ecommerce firms -- PayPal, Amazon, Alibaba -- who are looking to leverage their platforms to extend credit.

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Future of finance: When everyone is an online lender

  1. 1. ARE YOU AN ECOMMERCE PLATFORM OR A SMB LENDER? the future of finance when everyone is a lender
  2. 2. FUNDING FOR LENDING STARTUPS EXPLODING
  3. 3. WHY?
  4. 4. NEW COMPETITION FROM OUTSIDE TRADITIONAL FINANCE
  5. 5. LOTS OF MONEY AND OPPORTUNITY UP FOR GRABS
  6. 6. BUT SMBS AREN’T BORROWING JUST FROM BANKS they’re borrowing from a new class of lenders
  7. 7. ECOMMERCE LENDING TRANSACTIONS AND FINANCING
  8. 8. AMAZON LENDING ➤ Invite only, began in 2012 ➤ 90 - 180 day loans of $1k to $600k ➤ 6% - 14% interest rates ➤ Since inception, offered hundreds of millions of dollars worth of loans ➤ Announced Summer 2015, program is expanding to Canada, France, Germany, India, Italy, Spain and the UK Source: Business Insider
  9. 9. PAYPAL ➤ Fall 2015 announced it had surpassed $1 billion in SMB loans after 2 years ➤ 60,000 merchants have used PayPal’s Worlking Capital ➤ now lending $3 million/day ➤ Sizes and effective APR depend on sales volume merchants do using PayPal ➤ Recently expanded credit limits to $85,000 from $65,000, and simultaneously upped the amount a borrower could take on to 15% of sales (from 8%) Source: Forbes
  10. 10. LENDERS TARGET SHOPIFY MERCHANTS ➤ Kabbage provides loans to Shopify merchants ➤ Affirm, Max Levchin’s new online lender, allows Shopify merchants to provide financing options to customers
  11. 11. THE CHINESE ECOMMERCE/BANKING EXPERIMENT
  12. 12. TENCENT/WEBANK ➤ Tencent, one of top Internet companies in China, launched January 2015 first private online bank in China, called WeBank ➤ Tencent’s WeChat is one of most popular messaging apps in Asia, already offers personal loans in minutes (without guarantee/collateral) ➤ Seeking to raise $1 billion in fresh funds ➤ WeBank’s first loan was 35,000 RMB($5600)to a truck driver Source: TechCrunch, WSJ
  13. 13. ALIBABA/MYBANK ➤ Alibaba bank affiliate, Ant Financial launched MYbank Summer of 2015 ➤ Registered capital of 4 billion yuan ($644M) ➤ Issue loans of under 5 million yuan to SMBs ➤ Clouded by regulatory concerns Source: WSJ
  14. 14. BAIDU ➤ China’s Google has partnered with Citic Bank to launch an online bank ➤ Baidu has 640 million users and Citic Bank is China’s 6th largest bank with 4 trillion RMB ($626 billion) Source: CNBC
  15. 15. UNSECURED LENDING getting better at assessing risk with additional ecommerce data
  16. 16. KABBAGE ➤ Recently raised $135M + credit facility of $900M ➤ Funded over $1 billion to 100,000+ small businesses ➤ Loan approvals require link to business apps (Checking accounts, Intuit Quickbooks) ➤ Loans $5M to SMBs ➤ Plans to expand into Europe, Latin America, India, and Canada Source: Fast Company, TechCrunch
  17. 17. Both balance sheet lenders (OnDeck) and marketplace lenders (Funding Circle and Lending Club) are going after the SMB market
  18. 18. SECURED LENDING Securing collateral behind online lending
  19. 19. BORRO ➤ loans of up to $10,000,000 secured against luxury assets such as fine art, antiques, jewelry, luxury watches, prestige & classic cars, fine wine ➤ Raised over $170M in equity + lending facility ➤ Borro will usually get a loan to someone in 24 hours, with the average loan size at £70,000 and term of five months Source: Crunchbase, CityAM
  20. 20. FACTORING/ INVOICE FINANCE Providing financing for specific purchases
  21. 21. EXAMPLES (BEHALF, BLUEVINE, C2FO, FUNDBOX ) ➤ 82% of business failures are due to poor cash management ➤ In the United States, these invoices represent a $72 trillion market, according to Fundbox Chief Executive Eyal Shinar Source: Forbes
  22. 22. KICKFURTHER ➤ SMBs finance inventory to the crowd at a consigned rate. If funding goal is met, Kickfurther buys the inventory and gives to SMB. The business sells it, returning a % to backers each month, depending on volumes sold ➤ Backers earn equity-like returns in just a few months Source: MarketWatch
  23. 23. “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. -Charles Moldow, Foundation Capital
  24. 24. www.tradestreaming.com

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