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And now Blackstone: the Big Guns are entering Online Lending

And now Blackstone: the Big Guns are entering Online Lending | Disruptive Finance and Fintech | Scoop.it

"The start-ups that have come to dominate the online-lending industry will now have to compete with the world’s largest private-equity firm.

B2R Holdings, a portfolio company of a Blackstone Group fund, said on Thursday that it was getting into the business of providing loans for consumer purchases of big-ticket items as well as small-businesses loans."

Huy Nguyen Trieu's insight:

I previously wrote about a game changer in Fintech, when Goldman Sachs announced the launch of an online lending business for their SME clients (and very proud that you read about it in Disruptive Finance one month before the FT and the WSJ!). To my knowledge, this initiative is still moving ahead, and GS is hiring people from Lending Club / Prosper to develop the platform. 

At that time, I also said that "it will be fascinating to see what happens over the next few months, and if other banks will follow suit", and they have! Most recently, ING, Santander and Scotiabank have invested in Kabbage (a data-driven lender, and one of my favourite Fintech startups) and ING and Kabbage will launch an online lending business in Spain. In my opinion, there is no doubt that online (data-driven) lending will be the norm, and banks will move towards that model, whether through internal development, partnership or acquisition. We are therefore likely to see more news of this type in the future. 

When we think of finance, let's not forget however that private equity firms are also very massive. It was therefore extremely interesting to see Blackstone is launching an online lending platform, Lending.com.  Which means that after startups doing online lending, banks doing online lending, we now have shadow banking doing online lending. Whereas banks are very aware of the potential disruption from startups, does it mean they also need to watch the competition from private equity firms? What is clear, is that technology is currently reshuffling the financial sector, and disruption might come from players we don't suspect. 


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SoFi: a Fintech that uses Techniques from Traditional Investment Banks

SoFi: a Fintech that uses Techniques from Traditional Investment Banks | Disruptive Finance and Fintech | Scoop.it

"SoFi, a marketplace lender, announced it has priced a securitization of $417.6 million in refinanced student loans. It also announced SoFi was considered the first fintech company to receive an “AAA” rating from DBRS and an “AA2″ from Moody’s for the senior notes, which equaled $387.3 million."

Huy Nguyen Trieu's insight:

SoFi is one of the most interesting p2p lenders in my opinion. Although they are less well known that Lending Club or Prosper, they are perhaps the best to combine traditional finance to online lending.


They were the first to use securitization for their loans, then the first to get a rating from S&P, and now to get a AAA rating (arguably from DBRS, not S&P or Moody's).


They mention that 2/3 of all securitizations in online lending are made by SoFi. They are definitely a company to follow, because they are a good example of how online lending could be a part of traditional investment banking in the future.


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