• Subscribe
  • Contact Us
  • About LendIt Fintech News
  • Home
  • Menu Item
  • Menu Item
  • Menu Item
  • Menu Item

Lend Academy

LendIt Fintech News: Daily Coverage of Fintech & Online Lending


  • Editorial
  • Daily News
  • Podcast
  • Investor Forum
  • Events

CircleBack Lending Has Raised $1.9 Million in Equity Financing

January 8, 2014 By Peter Renton 2 Comments

Views: 918

New p2p lender focusing on institutional investors

Lending Club and Prosper have had the p2p lending market pretty much to themselves for several years now. While it wasn’t in my 2014 predictions I do think that this year we will see some new players gain some traction. And one of these players could well be CircleBack Lending.

CircleBack launched last July and have been in a beta period since then. Now, they are coming out of beta and are about to get serious after announcing today a new $1.9 million equity funding round. I did an email Q&A with Michael Solomon, CEO of CircleBack, today to get some more insight into their platform.

Lend Academy: How much loan volume did you do in 2013?

CircleBack: We originated a little over $200,000 in loans last year during our beta testing.

Lend Academy: What are your projections for 2014?

CircleBack: Our goal is to be around $40-$50 Million per month a year from now.

Lend Academy: What is the minimum investment?

CircleBack: The current minimum commitment is $1 million per month. We have a few preferred third-party funds that we can refer smaller investors to.

Lend Academy: Is it whole loans only? If not what is the minimum per loan?

CircleBack: We are only offering whole loan purchases at this time.

Lend Academy: Can investors pick and choose loans like at LC and Prosper?

CircleBack: Right now we will be automatically matching loans to investors so they each receive a platform-wide allocation.

Lend Academy: Are you developing an API?

CircleBack: Yes, an API is available to our investors, but not to the general public at the moment.

Lend Academy: What is the minimum borrower FICO?

CircleBack: Minimum FICO score is 660.

Lend Academy: Average loan size?

CircleBack: We expect our average loan size to fall around industry averages.

Lend Academy: Split of 36/60 month loans?

CircleBack: So far 36-month loans have comprised 44% and 60-month loans 56% of our volume. Of course the sample size is limited at this point.

Lend Academy: Are you using Transunion, Experian or Equifax?

CircleBack: We use TransUnion.

Lend Academy: Where are you open for borrowers ?

CircleBack: We are currently available in Georgia, New Mexico, West Virginia, and Wisconsin. Within the next few months we will be adding about 20 new states and continue to add states as we go.

Lend Academy: Finally, what differentiates you from Lending Club and Prosper?

CircleBack: We have several competitive advantages/differentiators:

  1. All our loan volume goes to institutions only (no retail investors to compete with) so our investors are able to capture 100% of the deal flow and this will equate to meeting the larger demands of this group as we scale (I know that might not make some of your audience happy).
  2. Loan process is optimized to minimize cash drag (loans are immediately matched with investor cash and all verification steps are taken in advance so no “cancelled listings” and no long “listing periods”).
  3. 200+ borrower/loan attributes available in investor portal so you don’t have to build your own API to access full datasets; also can create unlimited custom list views of loan portfolio and transactions in the portal
  4. CircleBack team is 100% dedicated to serving the institutional investor, no marketing or customer service time to retail market
  5. No SEC filing requirement for loan offerings makes us more efficient operationally and also allows for a more private marketplace
  6. Our technology—from front end to back end—is set up from day 1 to be highly scalable

So, there you have it. Circleback have a clear mission although we can’t really call them a p2p lender – they fall under the more generic online lending umbrella. And they are certainly not for individual investors.

While I think it is good that institutional investors have another option with CircleBack I don’t know if their competitive advantages over Lending Club and Prosper are that compelling and they have certainly set themselves some lofty goals. Regardless, given the huge investor interest in the market right now I would be surprised if they are not successful in gaining some traction this year now they have this new funding round under their belt.

I do congratulate them on closing this first funding round and hope they can turn into a major player. You can read their official press release here.

Filed Under: Peer to Peer Lending Tagged With: accredited investors, CircleBack Lending

Views: 918

Comments

  1. Randawl says

    January 9, 2014 at 11:36 am

    They will have to contend with the other copy-cats in the pipelines also riding on LC and Prosper’s coattails, though without that nagging “P2P” part so that they can demonstrate a “competitive advantage.” Although I do think they will be met with long-term financial success as they hope to gain market share in the exploding online lending industry.

    “Lending Club and Prosper have had the p2p lending market pretty much to themselves for several years now. While it wasn’t in my 2014 predictions I do think that this year we will see some new players gain some traction.”
    I think we will see some new P2P lending players gain some traction in 2014 as well, but it won’t be CircleBack Lending. As you mentioned, the bottom line is that they are a generic online lending company with a dubious, if any, link to the “P2P” model.

    Reply
    • Peter Renton says

      January 9, 2014 at 9:01 pm

      I don’t think we will see another p2p play like Lending Club and Prosper for some time, probably several years. What will probably happen is a platform will become successful with accredited/institutional investors and eventually they will do an S-1 registration and open to regular investors.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Investor Intelligence

Peter Renton's Returns

Investor Forum

Lending Club Review

Prosper Review

Investor Resources

Most Popular Editorials

The Pure Marketplace Lending Model is Dead, the Hybrid Takes its Place

The 2018 Lending Club and Prosper Tax Guide

My Returns at Lending Club and Prosper

Map of Available States for Lending Club and Prosper Investors

Banks and Marketplace Lending Platforms: Ideal Partners?

Subscribe to the Podcast

Subscribe to the Lend Academy Podcast on iTunes
Subscribe to the Lend Academy Podcast
List of Podcast Episodes

Archives

Follow @LendAcademy Follow @LendIt

ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

Recent Editorials

  • Top 10 Fintech News Stories for the Week Ending January 23, 2021
  • Podcast 282: Catherine Berman of CNote
  • Crypto Custody Gets Shot in the Arm from Goldman & Anchorage
  • LendingClub Receives Final Approval for its Acquisition of Radius Bank
  • Top 10 Fintech News Stories for the Week Ending January 16, 2021

Copyright © 2021 · Metro Pro Theme on Genesis Framework · WordPress · Log in