Money2020 Kicks Off – With part of last year’s prophecy fulfilledOctober 23, 2016 | By: Sean Murray
The industry’s biggest conference by attendance kicks off today at The Venetian in Las Vegas. With more than 10,000 attendees and 3,000 speakers, topics range from payments to financial services innovation.
During last year’s conference, alternative lenders appeared to be waiting for a shakeout. Has that happened?
It’s starting to. Since then, online lender Vouch Financial shut down and CircleBack Lending announced that they are no longer issuing loans. Lending Club’s founder resigned in a scandal, the pure marketplace lending model died and no other alternative lenders managed to IPO in 2016. Even a handful of merchant cash advance firms have quietly exited the market.
Valuations are down as well, perhaps more in line with reality. Robert Greifeld, the CEO of Nasdaq, warned attendees about the validity of private market valuations of fintech companies at Money2020 last year. “A unicorn valuation in private markets could be from just two people,” he said. “whereas public markets could be 200,000 people.” And the public markets have been tough. Lending Club’s stock has fallen by 67% since then while OnDeck’s has dropped by 52%.
And yet much of alternative lending is still standing and still raising capital. Over the summer, Fundry secured a new $75 million credit line, Bizfi secured a $20 million investment from Metropolitan Equity Partners, Pearl Capital secured $20 million from Arena Investors, and Legend Funding secured a $3 million debt facility from Ango Worldwide.
We’ll see what happens this week at The Venetian.Last modified: October 23, 2016
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.