Industry News
LendUp Adds Top Capital One Veterans to Its Board
June 21, 2018
LendUp announced today that Capital One co-founder Nigel Morris joined as board chair, and Frank Rotman, an early Capital One employee and its longtime Chief Credit Officer, joined as board member.
LendUp Co-founder and CEO Sasha Orloff is delighted about this, but not surprised.
“Our mission is to help people have a path to better financial health, which involves helping people improve their credit score and learn better financial behavior,” Orloff said.
He acknowledged that, unlike most banks, Capital One has focused on expanding credit to those with lower credit scores, which is exactly what LendUp focuses on. Orloff told deBanked that half of all Americans have a credit score of 680 or below, yet most banks and fintechs look to serve the top half. LendUp serves the bottom half.
“So it’s no surprise that our board now has Nigel Morris from Capital One and includes Blake Buyers from Google Ventures,” Orloff said. “It’s like an incredible dream to be able to have the best in technology analytics and the best in building financial services, together.”
LendUp provides an alternative to payday lending by offering unsecured loans between $100 and $1,000. LendUp launched a credit card last year that has been so popular, the company was unable to issue more cards and now has a waiting list of 250,000 people, Orloff said.
Prior to establishing LendUp in 2011, Orloff worked on the credit risk team at Citigroup and said one thing that really stood out for him was a study Citigroup helped conduct that revealed that the average person with a subprime credit score will pay $250,000 to credit card companies throughout their life. He wanted to change this. He also mentioned that one’s credit score is based primarily on two factors: on-time repayment and access to credit that you don’t use.
“So we design our loans and our card products to help people make sure they’re paying on time and make sure that they’re only using the credit that they need.”
Orloff said that LendUp places an emphasis on financial education. LendUp actually offers customers more money at lower rates if they take the company’s education courses.
LendUp also offers helpful perks like allowing the borrower to pick the day they want to repay, which Orloff said is a first. And unlike other credit card companies that usually offer either one or zero payment reminder alerts, LendUp sends three reminder alerts which they have found to be very helpful for their customers.
For busy people with children and often more than one job, Orloff said, “the first alert is a reminder, the second is like ‘oh, ok I’ll get to this,’ and the third is ‘ok, I’ve got to pay this now.’”
Based is San Francisco, LendUp employs 250 people.
Lendio Giving Program Funded $70,000 in Microloans Through Kiva
June 20, 2018
Lendio announced today that Lendio Gives, its employee contribution and employer matching program, has provided more than $70,000 in microloans to 2,800 underserved entrepreneurs in 78 countries through Kiva. Kiva is a nonprofit with a crowdfunding model that connects lenders to low-income entrepreneur borrowers. These microloans can be for as little as $25.
“At Lendio, we talk about ‘fueling the American Dream,’” Lendio CEO Brock Blake told deBanked. “That’s what we’re passionate about and what we’re driving. At Kiva, their mission is helping entrepreneurs throughout the world. So it was a natural extension to choose Kiva.”
According to Kiva’s website, Kiva emphasizes character over credit, and uses social underwriting to assess the creditworthiness of its borrowers. To date, Kiva has provided $1.2 billion in loans in 85 countries for everything from water and sanitation needs to working capital for small markets, restaurants and artisans.
The Lendio Gives program with Kiva started in 2016 and, according to a company statement, for every loan facilitated on the company’s marketplace platform, a percentage of the fee is donated to Kiva.
Back in April, Lendio announced that its Turndown program has facilitated nearly $60 million in loans in less than a year since it launched last summer. The Turndown program allows participating lenders to refer declined borrowers to the Lendio marketplace where borrowers can get funding elsewhere.
“The Turndown program is going extremely well,” Blake said. “It’s really helped us grow.”
Blake said that Lendio will be releasing numbers on the Turndown program within the next month or so.
Based in Salt Lake City, UT, Lendio was founded in 2011 and also has an office in New York. Of about 150 employees, 100 work at the headquarters in Salt Lake City and 50 work in New York.
Woman Arrested in Connection With Finance Company Data Theft
June 19, 2018
A woman was arrested in the Bronx this morning and charged with felony computer-related theft. The individual, whose name deBanked is not releasing until more information is known, was reportedly stealing customer data from Yellowstone Capital despite not being employed there. The photo shows police officers escorting her out from her home.
She is the third person to be arrested for stealing data from Yellowstone Capital in the last nine months but she’s the first that was not actually working there at the time.
Yellowstone Capital is arguably the largest merchant cash advance company in the country, according to deBanked’s leaderboard. The companies ranked ahead of them are lending companies, not MCA.
Reliant Funding is a Sponsor of deBanked CONNECT – San Diego
June 14, 2018Reliant Funding is a sponsor of deBanked CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
Check out photos from deBanked’s past CONNECT event in Miami
National Funding is the Title Sponsor of deBanked CONNECT – San Diego
June 14, 2018National Funding has signed on as the title sponsor of deBanked CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
Check out photos from deBanked’s past CONNECT event in Miami
New York Institute of Credit Celebrates 100 Years and Honors Harvey Gross
June 12, 2018
About 300 people gathered underneath the soaring ceilings of Guastavino’s ballroom in Manhattan last night to celebrate the 100th anniversary of the New York Institute of Credit (NYIC). Most attendees were members of the association, which provides networking opportunities and education to a myriad of constituents, including factors, financial advisors, lawyers, investors and accountants.
“[NYIC] is one of the few meeting places that brings judges, investors and professionals together,” said Jack Butler, CEO of Birch Lake, a boutique merchant bank based in Chicago.
In addition to Butler, other members, like Maxwell Cohen, traveled to attend to event. Cohen works in Fort Lauderdale, FL as Managing Partner for Corporate Strategy & Financial Consulting LLC and specializes in underwriting and brokering business loans.
“[NYIC] is great because it connects people in similar sandboxes…and sometimes we can build off each other’s strengths, ” Cohen said. “Everyone here is verified [and] if you’re here, we know you have capabilities to deliver.”
A central part the NYIC centennial celebration was the honoring of the organization’s Executive Director, Harvey Gross, who has worked for organization for 54 years.
A montage video of congratulations to Gross included praises from New York judges and others, including:
“He has a way of putting people together that produces spectacular results.”
“He’s been a mentor to so many.”
“Harvey has communicated best practices.”
“Some organizations looks inward. NYIC looks outward, because of Harvey’s leadership.”
“To talk about 54 years in five minutes is not easy, but I will try,” Gross said to the audience upon receiving the award. He explained that when he was 12 years old, his brother suggested that he get into the factoring business. He later told deBanked that he spent the next five or so years learning the business and left school by the time he was 18 to start a career in factoring. When he started working for the NYIC, the organization primarily served the factoring business, and has since expanded.
“I think tonight showed that the NYIC went through a lot of transitions over the last 100 years,” Gross told deBanked. “And we’re excited about new transitions in the next 100 years. And that includes MCA and fintech.”
BlueVine Raises $60 Million in Major Equity Deal
June 7, 2018
BlueVine announced this week that it closed $60 million in equity funding, the company’s largest funding round to date. The series E round was led by Menlo Ventures and includes new investors, including SVB Capital. All major existing investors also participated.
This new financing will be used to expand the company’s current invoice factoring and business line of credit products, and to develop new products.
“Our vision is to let our customers guide us,” BlueVine Chief Revenue Officer Eric Sager told deBanked, with regard to what products might come next.
BlueVine also plans to use the funding to accelerate R&D hiring. BlueVine’s total funded volume since inception is expected to top $1 billion this year, according to the company’s press release.
“In just four years, BlueVine has scaled two major financing products,” said BlueVine CEO and founder Eyal Lifshitz.
Founded in 2013, the company started with a factoring product and later introduced a line of credit product. BlueVine provides business lines of credit up to $250,000 and invoice factoring lines up to $5 million. These maximum credit lines have been steadily increasing, with the factoring line of credit twice as large as it was at the beginning of the year, according to a deBanked story from February. And its business line of credit was $150,000 at the start of the year.
The company generates its revenue about 50-50 from its factoring and line of credit products, and about 50 percent of its factoring clients also use its line of credit product, Sager said.
This new $60 million investment follows a credit facility of $200 million with Credit Suisse last month.
“BlueVine has continued to impress us since we first invested in 2015,” said Tyler Sosin, a partner at Menlo Ventures, in a written statement. “The company has demonstrated dramatic, sustainable growth and has proven that there is enduring value in developing a comprehensive offering of credit products that small and medium sized businesses can use throughout their lifetimes.”
Headquartered in Redwood City, CA, BlueVine also has offices in New Orleans, Jersey City and Tel Aviv, and employs approximately 200 people.
SuperMoney Launches No-fee Financing Platform
June 7, 2018At the Finovate Spring 2018 conference, CEO Miron Lulic and CFO Jesse Stockwell presented the company’s new SuperMoney No-fee Financing platform, which allows merchants to obtain point of sale financing from online lenders and banks.
“The options for small business point of sale financing are embarrassingly archaic and painfully expensive,” Stockwell said during their presentation. “In the current market, consumers lose, merchants lose and most lenders don’t even get a chance to play.”
The new platform allows a small business merchant, like a furniture store, to create a free profile that is co-branded with SuperMoney. With the profile, the merchant can easily see when a customer has applied for financing and follow up.
In addition to a sales boost for small businesses that can now offer financing to customers for free, Stockwell said that customers also win by being able to compare financing options. And he said that it’s a boon for lenders as well, as a high quality loan source.
According to a Forrester Consulting study on SuperMoney’s website, businesses that offer point of sale financing enjoy an average increase in sales of 17 percent and an average increase in order value of 15 percent.
The No-fee Financing platform is an expansion of SuperMoney’s core business as a financial services comparison platform. The platform will at first provide point of sale financing to three industries: home improvement, medical and trade schooling.
In May, Stockwell said that the company, which was founded in 2013, had signed up 250 merchants in a closed beta program.
“Now we’re ready to blow the cover off this thing and sign up 10,000 more [merchants] in the next year alone,” Stockwell said.
