Articles by deBanked Staff

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Co-founders of $2B Recurring Revenue Funding Platform Step Down

November 27, 2022
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pipelineIt’s not a loan, it’s a trade. That’s the mantra of Pipe, an alternative finance platform that allows businesses to trade their future recurring revenues in exchange for upfront capital today. It sounds similar to a merchant cash advance but the company has rejected such comparisons in the past. It instead branded itself as the “Nasdaq for revenue” and grew itself into getting a $2 billion valuation just last year.

Last week, however, all three co-founders announced they were stepping down from their roles. In an exclusive with Techcrunch, Pipe co-CEO Harry Hurst said that they realized they needed an executive team that could really take the company to the next level, explaining that “we’re 0-1 builders, not at-scale operators.”

The following day, a story in Forbes suggested that there was more to the announcement, drawing attention to the possibility that Pipe had facilitated deals with bitcoin mining companies and that a source had said that some of them had gone bad. A since deleted tweet by a VC had said that there had been a significant loss on at least one of them.

The timing of Hurst’s resignation, announced before a new CEO could even be hired, allowed rumors to swirl. On Sunday night, Hurst finally addressed them.

A tweet by a VC that had originally fueled some of the unflattering rumors has since been deleted.

Last Chance Black Friday Special – Early Bird Tickets to deBanked CONNECT MIAMI

November 25, 2022
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deBanked CONNECT MIAMI has extended its early bird ticket pricing for just 1 more day in honor of Black Friday. Today is your last opportunity to take advantage of a lower price!!!

deBanked CONNECT MIAMI is being held at the Miami Beach Convention Center on January 19th!




REGISTER HERE




Our office will reopen on Monday, November 28th.

deBanked CONNECT MIAMI

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IOU Originated Whopping $74.2M in Q3

November 21, 2022
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iou homepageIOU Financial experienced a strong third quarter, reporting total loan originations of $74.2M, a 25.8% increase over Q2. The year-to-date total now stands at $192.7M.

“IOU Financial continues to grow revenues and invest in scalability while reducing its adjusted operating expense ratio,” said Robert Gloer, President and CEO, in an official announcement. “We remain laser focused on scalability and growth while maintaining consistent underwriting standards, and we expect to build on this trend in the months and quarters to come.”

IOU attributes the growth to “healthy demand from borrowers” and “continued demand from investors seeking high quality loans.”

Notably, the company said that collections had been in line with expectations and it had “not seen significant increases in delinquencies, defaults or loan modifications.”

The Canadian Lenders Summit is Back

November 15, 2022
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Canadian DollarsdeBanked will be attending the Canadian Lenders Summit on Wednesday in Toronto. It is the first major in-person event produced by the Canadian Lenders Association (CLA) since covid. The last event in 2019, also attended by deBanked, was a hit.

More than 500 people are registered for this one.

The chairman of the CLA is Neil Wechsler, CEO of OnDeck Canada.

Garcia Expected to Agree To Consent to SEC Judgment in MJ Capital Case

November 15, 2022
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Former MJ Capital Funding CEO Johanna Garcia is expected to consent to judgment with the SEC without admitting or denying the claims, according to documents filed in the SEC case. As part of that she will have to disgorge ill-gotten gains, pay prejudgment interest thereon, and incur a civil penalty. The total amount is to be determined.

At last tally, the Receiver said it had received more than 10,000 claims and is busy verifying all of them. MJ Capital raised nearly $200M from investors.

Don’t Forget About Utah’s Disclosure Law

November 14, 2022
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Utah flag on moneyWhile a new era of business moves forward in Virginia and the clock ticks down to compliance with the new complicated disclosure law in California on December 9th, it can be easy to miss state #3 in all of this, Utah.

Utah’s commercial financing disclosure law goes into effect on January 1, 2023. It’s more than just a form. Covered parties must apply for a commercial financing license. A checklist for that can be found here. Similar to other states, the commission paid to a broker must be disclosed but there is no APR requirement.

The full law can be read here.

Upstart Funded $9M in Small Business Loans in Q3

November 8, 2022
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upstart websiteThey’re known as a consumer fintech lender but last quarter Upstart also originated $9M in small business loans. It’s a new market it entered into this past June that coincided with revelations that the company is struggling in its core lending divisions due to adverse market conditions that led to a 90% drop in its stock price. Nevertheless, despite just laying off 7% of its workforce, Upstart sees small business lending as a growth opportunity.

“Well now we’re close to $10 million in loans originated and the team is rapidly shipping improvements as we look to refine that product,” said Upstart CEO David Girouard during the quarterly earnings call. “While the financial impact of these upgrades to our products is muted in the current environment, we’re confident that they’ll set us up for a giant leap forward once the economy and credit markets normalize.”

Upstart considers small business lending to be a $644B/year market, according to the quarterly earnings presentation. When questioned if it made sense to be investing in this business versus just trying to manage expenses in the near term, Girouard said “the way we think about that is we would like to, to the extent possible, continue to invest or even increase investment in the future products because that’s obviously what our franchise is built on and what will lead to significant growth in the future.”

Upstart set a record in Q3, claiming that 75% of all the loans made on its platform during the quarter required no human intervention.

Square Funds $1.14B in Q3

November 5, 2022
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Square in San FranciscoSquare Loans, a subsidiary of Block, originated 126,000 loans for a total of $1.14B in Q3. The company has a positive outlook on the state of its lending business, saying that “Square Loans achieved strong revenue and gross profit growth during the third quarter of 2022.” Overall, originations grew by more than 10% over the previous quarter.

Square Loans is one of several lenders thriving during this period of economic uncertainty. Rivals Enova and Shopify Capital also recently reported strong business loan results.