|02/11/2020||LendIt launches women's mentorship program|
|10/23/2019||LendIt China 2019 is canceled|
|04/10/2018||SoFi CEO's Bloomberg Interview at LendIt|
|12/20/2017||Nominate yourself for a LendIt Award|
|12/14/2017||LendIt co-founder's thoughts on crypto|
Noah Breslow - LendIt 2015
Episode 24 - Lendit Fintech Virtual 2020
The LendIt Fintech digital conference last week was a sign of the times. This year, millions of average businesses and consumers have had to go virtual: they had no choice. 2020 has been a year of struggle and survival, and a time of great fintech adoption.
Some firms have been more successful than others. Going full digital, LendIt introduced virtual networking at the conference- the first day alone saw 2,171 meetings. Zoom meetings and virtual greetings took the place of handshakes and elevator pitches that would regularly accompany the convention.
On day three, LendIt hosted a panel of SMB lending leaders from Stripe, Shopify, Square, and Quickbooks Capital. Bryan Lee, Senior Director of Financial Services for Salesforce, served as moderator and he focused the discussion on “How the leading fintech brands are adapting.”
Lee began the talk by asking Eddie Serrill, Business Lead from Stripe Capital, about how the industry has pivoted.
Serrill talked about how Stripe was powering online interactions and saw an influx of traditionally offline businesses switching over to their platforms. Stripe also saw an increased demand for online purchases and payment.
“We’ve been trying to find that right balance between supporting users that have been doing incredibly well,” Serrill said. “While trying to support our users who are seeing a bit of a setback.”
Stripe introduced a lending product in September of last year and now SMBs can borrow from Stripe and pay back by diverting a percentage of their sales, much like the other panelists’ companies offer.
Jessica Jiang, Head of Capital Markets at Square Capital, talked about how her firm adjusted. Square reacted to fill the niche of their underserved customers by introducing a main street lending fund, serving industries hard hit by the pandemic, Jiang said. Small buinesess that relied on in-person action like coffee shops and retail community businesses were given preferential lending options.
Product Lead at Shopify, Richard Shaw, said that this year his firm learned to be prepared for anything. Everything that Shopify was potentially going to do or planning on implementing in the coming years suddenly became a here-and-now necessity.
“We tore up our existing plans,” Shaw said. “It was like the commerce world of 2030 turned up in 2020. You need to do ten years of work, but you need to do it today.”
Shopify, the Canadian e-commerce giant has doubled in value this year. The firm launched Shopify Capital in the US and Canada in 2016 and has originated $1.2 billion in funding to small businesses since that time.
Luke Voiles, the VP of Intuits QuickBooks Capital, talked about how his team handled pandemic conservatively.
“Five years of digital shift has happened instantaneously due to COVID,” Voiles said. “Intuit is pretty recession-resistant in the sense that you have to do taxes, you have to do your accounting, and the shift to digital helps a lot.”
Business lending was different, Voiles said, as soon as his team saw COVID coming, they battened down the hatches, slowed lending, and pivoted to facilitating PPP.
Voiles said the craziest thing he has seen in his career was what Quickbooks did to deploy PPP aid.
Within about two weeks, almost 500 people from across Intuit came together to shift all the data they carried on customers to aid applications.
“We were uniquely positioned to help solve and deploy that capital,” Voiles said. “We have a payroll business where 1.4 billion business use us, we have a tax business where we have Schedule C tax filings, and we have a lending business. We were able to pivot and put the pieces together quickly.”
QuickBooks Capital deployed $1.2 billion to 31,000 business in a process that Voiles said was 90% automated. Now customers are awaiting other rounds of government aid.
Square’s Jiang said the initial shutdown weeks in March and April saw hundreds of Square team members working on PPP facilitation through the night and weekends. As the funds dried up those first two weeks, it was clear to Jiang the program was favoring larger firms and higher loan amounts, leaving out small businesses.
“That’s typical of investment bankers, but not very typical of tech,” Jiang said. “PPP is a perfect example of how small businesses are continuing to be underserved by banks.”
THE SHAKEOUT AND THE FUTURE
2020 has been a major shock to the lending marketplace. Voiles from Quickbooks said the amount of work it took to make it through the first wave was a significant shakeout.
“You’ve seen what’s happening with Kabbage and OnDeck and other transactions with people getting sold; there is a shakeout happening in the space,” Voiles said. “The bigger players will make it through and will continue to help small businesses get access to capital that they need.”
When asked about the future roadmap of QuickBooks Capital, Voiles said it wasn’t just about automating banking. Using Intuit’s resources to build an automated system is only half of the picture- the firm believes in an expert-driven platform. After the automated process, customers will be able to talk to an expert to review the data, and “check their work.” Voiles said Quickbooks wants to offer a service that is equivalent to the replacement of a CFO.
“These small businesses that have less than ten employees, they can’t afford to hire a pro,” Voiles said. “They need automated support to show them the dashboard and picture of what their business is.”
Pointing to Stripe’s online infrastructure, Serrill exemplified what successful lenders will offer next year: a platform that combines many needs of SMBs in one place.
“I think it’s really about linking all of this data, making it super intuitive and anticipating the need for their users, so they don’t need a team of business school grads to manage their finances,” Serrill said. “So they can get back to building the core of their business, not figuring out whether they have enough cash flow tomorrow.”
Jiang said the future of small business would be written in data, contactless payments, and digital banking. She sees consolidation in the Fintech space and has a positive outlook on bank-fintech partnerships.
The FDIC granted Square a conditional approval for the issuance of an Industrial Loan Company ILC in March this year. Jiang outlined plans on launching an online SMB lending and banking service next year called Square Financial Services if the conditional charter remains in place.
For Shopify’s future, Shaw was excited to look forward to the launching of Shopify balance- a cash flow management system, and Shopify installment payments. He reiterated that the success of Shopify’s lending division was due in part because making loans was not the entire business.
“Shopify Capital is one piece of a wider ecosystem,” Shaw said. “All these things together are more powerful than individual parts.”
LendIt Fintech has officially announced that there will be no conference in China this year after 3 long years in the country. A blog post written by LendIt Fintech co-founder Peter Renton explained that calamitous events engulfing the peer-to-peer lending industry there, namely the abundance of fraud, and the government’s waning tolerance, has led them to believe that no lending companies will be interested in speaking, sponsoring or even attending this year.
“We will regroup in 2020 and hopefully will be able to bring our unique event back to China,” Renton wrote.
The decision only applies to their Lang Di Fintech China event. Their US event is scheduled to take place in New York this year on May 13-14 at the Javits Center. That event will be immediately followed by deBanked’s Broker Fair 2020 at the brand new Convene at Brookfield Place on 225 Liberty Street in New York on May 17-18.
when speaking about the increase in mortality rate for people who have faced major financial distress
when interviewed by Jo Ann Barefoot
When asked by Bloomberg Technology reporter Emily Chang if Goldman Sachs would be considered a competitor
when interviewed by Lendio’s Brock Blake
When asked who will win the race for marketshare
When asked if it’s harder to underwrite loans above $50,000
talks business at the company booth
Below: Ocrolus account executive John Lowenthal stands in front of the company booth
Ocrolus, which provides analysis of financial documents, announced today a $4 million Series A investment led by Bullpen Capital with participation from QED Investors, Laconia Capital Group, ValueStream Ventures and RiverPark Ventures. The company says that its lean RegTech technology analyzes bank statements and other financial documents with over 99 percent accuracy.
“We’ve proven our technology as a disruptive solution for bank statement analysis,” said Sam Bobley, co-founder and CEO of Ocrolus. “Customer demand prompted us to begin analyzing loan applications, tax documents, pay stubs and more. We’re thrilled to have the capital to quickly expand our team, and ideal strategic partners to help us scale the business.”
Orcolus’ technology has been embraced by alternative funders that want to expedite their underwriting process.
“Data entry is not a core component of our business,” said Sol Lax, CEO of Pearl Capital. “Ocrolus has become our trusted partner for bank statement reviews, allowing us to scale volume with a leaner underwriting staff.”
The New York-based company, which has 19 employees, was founded in 2014, but wasn’t launched until 2016. Bobley told deBanked that the first few years were devoted to research and development and he also told us a little bit about the company name.
“The core technology that we built the system on is called OCR, for Optical Character Recognition,” Bobley said. “So the idea is that Ocrolus is an expanded and modern version of OCR…which can read statements with 85 to 90 percent accuracy, [while] Ocrolus reads statements with 99 percent accuracy.”
NSR Invest has acquired LendingRobot to become the largest robo-advisor in the alternative lending space, according to an announcement made by both companies.
Of note is that three of NSR Invest’s co-founders, Peter Renton, Bo Brustkern, and Jason Jones, are also co-founders of the LendIt Conference.
The acquisition is a reminder that the conference founders are also significant players in the alternative lending space itself. According to the announcement, the new combined parent company, Lend Core, LLC, serves over 8,000 clients and manages over $150 million in assets.
For those not familiar with LendingRobot, deBanked started reporting on the company more than two years ago as a tool for investors to automate their investment picks on marketplace lending platforms like Lending Club and Prosper. I eventually became an individual paying customer of the service, using it to automate the purchase of nearly $30,000 worth of tiny $25 and $50 notes that fit within the parameters I had set. LendingRobot’s classic service can also automate investments on the Funding Circle platform, though I have never signed up with Funding Circle or invested in their loans.
When I last met with Emmanuel Marot, LendingRobot’s CEO, in person, he was launching a new hedge fund dubbed the LendingRobot Series that would be managed with robo-advisor technology. The hedge fund was included in NSR Invest’s acquisition.
NSR Invest CEO and LendIt co-founder Bo Brustkern will lead the combined entity as CEO. In a prepared statement he said, “We have long respected the work of the LendingRobot team and recognize that our companies are pursuing a common goal. That is, to provide a unifying investment solution for the millions of investors worldwide who seek the attractive, uncorrelated, diversified returns that alternative lending can provide. With this combination of our firms, we are bringing enhanced capabilities to our combined client bases today, and big plans for the future. A shining example of the kind of innovation that we will emphasize is the Lending Robot Series Fund, which provides customization, liquidity and diversification to investors through a novel, elegant, low-cost fund structure.”
Meanwhile, Marot will continue on only as a special advisor to the company. In a prepared statement, he said, “NSR and LendingRobot have taken different tracts to provide similar services. Now is the perfect time to combine our complementary strengths. The combination of LendingRobot’s advanced technology and NSR’s extensive knowledge of this industry puts us in the best position to provide superior investment advice in the alternative lending space for both individual and institutional investors.”
Monday kicks off the LendIt conference at the Javits Center in NYC. Given that it’s the biggest event of the year for the industry, I certainly hope to meet as much of you there as possible.
If you still haven’t registered, make sure you at least take advantage of a 15% discount by using promo code: Debanked17USA. My schedule is pretty booked up, fueled in part by the excellent session topics this year which I want to catch a bunch of. That being the case, I am potentially available to get together even on Sunday or Wednesday (since I live in Manhattan) or any other day outside of the conference.
I hope you enjoy LendIt. You should check out their story of how they came to be HERE.
The LendIt Conference was supposed to be a smallish local meetup for New York-based members of the online lending community. But founders Jason Jones and Bo Brustkern soon discovered they had the makings of a big annual industrywide national convention. And before long, they found themselves replicating their successful American show on other continents.
To understand how the trade show was born and how it’s matured, flash back about seven years. In 2010, Jones and Brustkern were putting together venture capital deals when they happened onto the fledgling peer-to-peer lending movement. “Consumer credit was something we weren’t all that knowledgeable about, but we could see the market was large,” recalls Jones. “There was a clear opportunity that was structural in the market, and there were stable, consistent returns.” So the two of them launched one of the first P2P funds.
Their lending business soon took off, but Jones and Brustkern felt they were working in a void. The industry lacked community, and they decided to do something about it. Jones contacted his friend, Dara Albright, who had been organizing a series of crowdfunding conferences for Wall Street starting in mid 2011.
To heighten the credibility of the new confab, Jones, Brustkern and Albright decided to seek the help of Peter Renton. They didn’t know Renton personally but considered him “the voice of the industry,” Jones says. Renton had nurtured and sold off two printing businesses and used the proceeds to take up online lending as a hobby. He had also launched the Lend Academy in 2010 to teach the world about peer-to-peer lending. Somehow, he had also found the time to develop a following for himself as a blogger.
In early January of 2013, Jones and Albright cold-called Renton to gauge his interest in putting on a show. As fate would have it, Renton had just made a New Year’s resolution to launch a conference for lenders and was receptive to joining up. Together, they put a plan in action.
The originators put up their own money and worked together daily from January to June of 2013, when the first show convened. They secured space that would contain 220 people and calculated their break-even point as 200 attendees. “This was never intended to be a profitable enterprise,” Jones says of those early days. “This was something we all wanted to do for the community. We thought that if we wanted it, others would want it.”
More than 400 people registered for that first conference. “We had a line literally out the door,” Jones notes. “We had to shut off registration. We ended up squeezing about 375 people into that first event. It was completely shocking to us.” From the beginning, attendees came from all over the world. “That’s when I learned China had a P2P industry,” Jones says.
After the initial event, Jones, Brustkern and Renton formed a unified company. Renton brought in Lend Academy, while Jones and Brustkern added their investment fund. The conference also became part of the united company. Ever since, a holding company has owned all three businesses. Dara went on to launch Fintech Revolution TV and continues to support LendIt.
From the initial attendance of 375, the U.S. conference grew to 975 attendees in 2014, 2,500 in 2015, 3,500 in 2016 and a projected 5,000 for this year. About 33 percent of attendees come from the fintech industry, 23 percent are investors, 23 percent are service providers, 14 percent are banks and 2 percent come from government, the media and other backgrounds, Jones says. At first, many of the attendees come from the ranks of CEOs and managing partners, but that’s changing as the industry comes to view the conference as an annual convention where lower-ranking members of an organization can learn about the business, he notes.
Meanwhile, the exhibition floor is becoming an increasingly important component of the show. The gathering attracted 18 exhibitors in 2013, followed by 47 in 2014, 112 in 2015, 177 last year and an expected 210 this year. “We’re transforming from a conference-led event to an expo-led event,” Jones says. This year, exhibitor booths will occupy a 120,000 square-foot hall in New York’s Jacob K. Javits Convention Center.
The U.S. LendIt conferences alternate between San Francisco and New York City, renting larger spaces as the show has grown, Jones explains. Two years ago, the gathering seemed cramped in the gigantic New York Marriott Marquis near Times Square, he says, necessitating this year’s move to the Javits Center. Javits is designed for conventions with at least 10,000 attendees so the show is a little small for that venue, he admits. But the facility could become LendIt’s long-time New York home as growth continues, he predicts.
Jones traces some of the growth in exhibitors to the expansion of the fintech industry. “You have a meeting of the start-ups with the more traditional players who are rethinking their businesses and how to apply the new technology that’s being developed into their businesses,” he says.
Conferences that compete with LendIt in the fintech category are proliferating because of the nature of industry, in Jones’ view. As soon as fintech companies are launched, the internet quickly makes them national or even international in scope, he says. At the same time, the anonymity of cyberspace creates a need for gatherings that provide face-to-face meetings, he maintains. “They live online,” he says. “The spend their year online so there is a need for a convention to meet with their peers, their clients, their service-providers, their customers, their suppliers. There is a need for that physical connection.”
The increase in fintech conferences is also driven by content-related companies that provide articles on fintech innovation. Those sites have regarded conferences as money-makers that complement their journalistic endeavors, Jones says. For example, TechCrunch, an online publisher of technology industry news, puts on the TechCrunch Disrupt conferences in San Francisco, New York City, London and Beijing. In another example, Business Insider conducts the IGNITION conference.
Those forces – the internet, globalization and web-based publishing – are making themselves felt in the convention business in general, not just in fintech, Jones notes. Event-related companies trade at roughly 12 times EBITDA (earnings before interest, tax, depreciation and amortization), he says, characterizing the convention business as “a very healthy category of our economy.”
Still, the fintech field’s crowded with more than 30 conferences, but LendIt is succeeding because of its early start and an emphasis on community, according to Jones. “We come from the industry,” he contends. “People are happy with what we can produce. They love our content so they come to learn.” Because the conference has become established, the media outlets focus on covering it, which encourages businesses to use it as a stage for introducing products or announcing mergers and acquisitions, he maintains.
Jones views LendIt and Money20/20 as the largest pure-play fintech conferences. The latter, which attracts 11,000 attendees, focuses on payments and contains a “layer” of fintech, while LendIt specializes in lending and likewise offers a “layer” of fintech, he says. Payments and lending represent the two biggest categories in fintech, so the structure of the shows makes sense, he suggests. By chance, Money20/20 occurs in the fall and LendIt takes place in spring, creating what he considers a “nice balance” that encourages prospective attendees to go to both shows.
Finovate holds a rival fintech conference that focuses more narrowly on innovation than do the LendIt and Money20/20 shows, Jones says. A competing bank securitization conference offers information on lending but doesn’t address fintech in great detail, he says.
While LendIt has been coming of age in the U.S., it’s also gained siblings in Shanghai and London. The Chinese edition of the show, which made its debut in 2014, ranks as the largest fintech show in Asia. The Chinese fintech market has grown to at least five times the size of any other market in the world, and it’s home to four of the world’s five largest fintech companies, Jones says. “We were completely blown away,” he says of learning about the industry during a visit to China.
Despite the language barrier and the challenges of dealing with an unfamiliar culture, LendIt has managed to prosper in China. Through a joint venture with a local financial think tank, LendIt helped produce annual Chinese events known as the Bund Summit for two years with attendance capped at 500. For the third year, LendIt parted ways with its partner and recast the show as a larger event. After the change, the confab, now called the Lang Di Fintech Conference, attracted 1,200 attendees, making it China’s largest. “There’s a ton of future opportunity,” Jones predicts of the China endeavor. “We want to be the annual convention for the Chinese fintech industry.”
Although it’s difficult to set up operations in China, cooperation has prevailed there in at least some areas. “The government has been quite supportive,” Jones says of of Chinese officials. “They appreciate what we’re trying to do there.” In January, LendIt launched its Chinese language daily news feed.
Thousands of miles away, the European-based LendIt confab ranks second in size on that continent only to the European version of Money20/20, Jones says. Attendance at the London-based LendIt show numbered 450 in 2014, which was its initial year. It climbed to 800 in 2015 and reached 925 last year.
Putting on the European event requires much less effort than the Asian version because it’s almost an extension of the U.S. original, he says. It’s dominated by firms from the United Kingdom but draws a smattering of companies from other European nations. Crossing borders presents challenges for European fintech companies, which keeps the industry’s companies smaller there than in the U.S. and China, but that may change, he believes. “There’s a lot of innovation there, but they still have a ways to go,” he says.
To handle its far-flung operations, LendIt relies on 20 full-time employees, 11 contractors and 10 people working in a joint venture in China for a total of 41 staff members. “These events are incredibly large shows, and we constantly feel understaffed,” Jones says. That feeling prevails despite recent additions to the staff, he notes.
And additional opportunity beckons in myriad locations. “The challenge is, do you have a bunch of conferences all over the world, or do you do a beachhead and pull people to those three events?” Jones wonders aloud when asked about the future. “For the moment, we have made the strategic decision to stick with these three events and go deeper with them. But there are so many opportunities all around the world. We’re constantly being asked to come to different countries.” Then, too, LendIt could convene smaller, one-day events around the glove as feeders to the three main conventions, he allows. “That’s something we’re batting around now.”
The established two-day conferences could also grow into three-day affairs – but not right away, Jones suggests. “We’re totally running out of time,” he says of trying to cram in all the speakers and exhibitors that LendIt would like to present. Stretching the format could create conflicts because some participants attend other events immediately before or after LendIt.
Notable LendIt speakers have included Larry Summers, who’s served as Harvard president and U.S. Treasury Secretary; Karen Mills, former administrator of the U.S. Small Business Administration; John Williams, president and CEO of the Federal Reserve Bank of San Francisco; and Peter Thiel, venture capitalist and member of the Trump transition team. This year, attendees can look forward to meeting the robot that represents Watson, the IBM computer. Watson will take the stage to field questions about fintech. For Jones, however, creating a conference isn’t just about the big-name speakers be they human or mechanical. “People who are lesser-known can be really fascinating,” he says.
Whoever handles the speaking duties, the LendIt Conference executives vow that they’re in it for the long run as the fintech industry’s annual convention during both boom times and economic slumps. As Jones puts it: “We want to be a reflection of our industry.”
The LendIt Industry Awards has named six finalists for the Top Small Business Lending Platform. They are:
- Ascentium Capital
OnDeck you should know by now. They are publicly traded on the NYSE under ticker ONDK. We last sat down with them in October, shortly before they announced a $200 million credit facility with Credit Suisse.
Kabbage was one of the first online small business lenders to truly experiment with complete automation. In the last year the company has partnered with banking giants Santander and Bank of Nova Scotia.
SmartBiz ranked as the number one provider of non-Express, SBA 7(a) loans under $350,000 for fiscal year 2016. An online platform, they generated $200 million in funded SBA 7(a) loans through its bank lending partners during that period.
StreetShares has a strong focus on funding veteran small businesses. The company is also one of a very few to get approved for Reg A+ under the JOBS Act, which allows them to accept investments from unaccredited retail investors (with some limitations).
Ascentium Capital actually funded nearly $900 million to small businesses in 2016 and was acquired by PE firm Warburg Pincus just a few months ago.
iwoca is based in the UK but also operates in Germany, Spain, and Poland. They offer lines of credit to small businesses up to £100,000 with repayment terms of up to 12 months. Interest rates range from 2% to 6% per month. iwoca has raised £46 million through debt and equity.
According to LendIt, finalists for this category were awarded to the top small business lending platform based on a combination of loan performance, volume, growth, product diversity and responsiveness to stakeholders.
A similar category, the greatest Emerging Small Business Lending Platform also had six finalists. They include:
- ApplePie Capital
- Capital Float
- Credibility Capital
- Wunder Capital
More than 30 industry experts will judge and select award winners. You can view all categories, finalists and judges here.
You can also get 15% off the LendIt Conference registration with promo code: Debanked17USA.
lendit end up being the biggest frauds....
lendit two weeks ago was no different. below are some of the most notable quotes from his april 10th presentation., , on building a brand, , unfortunately, in the online lending space, most companies basically think that boiler rooms = brand...
Kabbage Doesnt Like working brokers...
lendit two weeks ago was no different. below are some of the most notable quotes from his april 10th presentation., , on building a brand, , unfortunately, in the online lending space, most companies basically think that boiler rooms = brand...