• 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

The Top Ten Biggest Fintech News Stories of 2020

It was a tumultuous year with the pandemic impacting fintech companies in different ways but here are the stories we think were most important

December 30, 2020 By Peter Renton Leave a Comment

Views: 688

As the sun sets on 2020 and we look back at this past year nearly everything is viewed through the lens of the pandemic. Many fintech companies did surprisingly well while others, particularly in the lending space, struggled. When we look at the year as a whole we see that it was M&A activity that consistently showed up in the news, some related to the pandemic, some not. But the biggest story 0f the year, in my opinion, was how fintech came to the aid of millions of small businesses in the PPP. Here are my top fintech news stories of 2020 (with my usual focus on lending and digital banking):

1. With the PPP Fintech Comes of Age

Rob Frohwein, CEO and Co-Founder of Kabbage, said it best on the LendIt keynote stage this year: “Kabbage was built for the PPP”. So, it was was for many fintech lenders in the small business space. Tasked with having to develop new systems for the Paycheck Protection Program in a matter of days, rather than months, the fintech industry responded and helped provide a huge number of small businesses with the loans they needed, saving millions of jobs in the process. It was not just Kabbage, we had Cross River Bank and Square as well as the loans marketplaces like Lendio leading the way.

2. Intuit to Acquire Credit Karma for $7 Billion

Credit Karma has almost singlehandedly increased the awareness of credit scores for tens of millions of Americans over the last decade. Intuit realized the value in the incredibly rich dataset that Credit Karma has created and wanted that, and the huge customer base, for themselves. And they were willing to pay to the tune of $7.1 billion. In the end this deal closed for $8.1 billion earlier this month with Credit Karma having to divest their fledgling tax preparation business, it was sold to Square for $50 million. For more on this deal read this interesting piece in Fortune.

3. Visa to Buy Plaid in $5.3 Billion Deal

[Read more…]

Filed Under: Fintech Tagged With: American Express, Credit Karma, Cross River Bank, Intuit, Kabbage, lendingclub, Plaid, PPP, Radius Bank, Upstart, Varo, Visa

Views: 688

It’s Official: American Express is Acquiring Kabbage

Another blockbuster fintech transaction is in the works as American Express announces it is acquiring Kabbage for an undisclosed sum

August 17, 2020 By Peter Renton 1 Comment

Views: 732

Kabbage CEO Rob Frohwein speaking at LendIt Fintech USA in 2019

The great fintech consolidation of 2020 continues. While we knew this deal might be coming, as it was leaked last week, today they made it official. Kabbage is being acquired by American Express for an undisclosed sum, although last week the rumor was that it would be “up to $850 million.”

In a letter the founders of Kabbage, Rob Frohwein and Kathryn Petralia, shared today they had this to say about the deal:

Although this is our first time sitting in the seat of the entrepreneurs selling their “baby,” we are certain it’s not uncommon to have a bittersweet feeling. On the one hand, we are entrepreneurs through and through and relish the daily fight that is required to push a company forward (not to mention through a pandemic). On the other hand, we are not joining just any company, but a company we have long admired that shares our vision to strengthen small businesses.

Importantly, we’re integrating with an incredible team. We’ve known Anna Marrs, the spectacular and authentic leader of the Global Commercial Services division of American Express, long before we started this particular conversation. The same goes for Steve Squeri, the CEO of American Express, who is not just a widely respected CEO but a genuinely nice, down to earth guy. We are joining an illustrious company of exceptional people and that is what makes us so excited about this transaction.

Kabbage has expanded beyond lending in recent years with the launch of Kabbage Payments, Kabbage Insights and just last month Kabbage Checking. They now have a chance to integrate these offerings into the vast Amex empire.

Interestingly, according to the press release AmEx will acquire the technology, people and data of Kabbage, but not its loan book. Given the state of small business today and the uncertainty over the potential outcome of the loans AmEx is taking that potential downside risk off the table.

Anna Marrs, President of Global Commercial Services at American Express, said this in an official statement: [Read more…]

Filed Under: Fintech Tagged With: acquisition, American Express, Kabbage, small business, small business lending

Views: 732

Inside the Groundbreaking Nova Credit-American Express Partnership

Immigrants will be able to use their international credit history when applying for an American Express card

October 29, 2019 By Peter Renton 2 Comments

Views: 597

It all started with a cold LinkedIn message back in 2016. The co-founder of the (then) tiny startup Nova Credit, Nicky Goulimis, reached out to an executive at American Express to discuss a potential partnership. It was an audacious move but one that, three years later, has paid tremendous dividends for the company.

First, some background. Nova Credit is an award-winning startup (they were the 2017 PitchIt @ LendIt winner) trying to solve what has been an intractable problem. New immigrants, no matter how great their credit was in their home country, are treated like subprime borrowers with no credit history when applying for credit in this country. In today’s interconnected world this is just crazy.

I lived this problem firsthand when I first moved to this country many years ago. So, did the co-founders of Nova Credit and they decided to do something about it. I spoke with Nicky Goulimis, their COO, yesterday to find out how they were able to win over American Express and establish this groundbreaking new partnership.

After that initial message Nova Credit found a receptive audience in American Express. Nicky said, “They immediately grasped what we were trying to do. Our vision of creating a world beyond borders aligns with American Express’s promise to back its cardmembers, wherever they might hail from.” American Express recognized right away that this was a pain point for many potential American Express customers who were prime consumers back in their home country.

How the Partnership Will Work

[Read more…]

Filed Under: Fintech Tagged With: American Express, Credit Bureau, fintech partnerships, International, nova credit

Views: 597

PeerIQ’s Q4 2018 Lending Earnings Insights Report

PeerIQ's latest Lending Earnings Insights Report points to a strong economy but bank and card issuer CEOs are cautious about being late in the credit cycle.

November 20, 2018 By Todd Anderson 1 Comment

Views: 237

PeerIQ released their Q4 2018 Lending Earnings Insights Report which points to a number of themes showing the economy is strong but CEOs are striking a cautious tone. Delinquencies and defaults continue to be low as consumers have seen their wages rise and taxes drop. Lenders are increasing reserves as they anticipate credit to renormalize in the near future, saying the economy right now was too good to be true.

The report covers earnings reports from big banks and fintech lenders. Stock performance was mixed with the flattening yield curve causing banks and card issuer stocks in particular to suffer. Companies covered include Enova, LendingClub, One Main Financial, OnDeck, GreenSky, Bank of America, Citibank, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Wells Fargo, Capital One, Discover, Synchrony and American Express.

One of the growing trends has been the pull back by banks lending directly to consumers and small businesses. Banks are instead increasing funding lines to non bank lenders, credit facility volume has grown 6x since 2010. The growth in originations from non bank lenders has forced regulators to look at them more closely, while the FDIC is considering granting ILC charters to non banks.

Broadly across the credit spectrum fintech lenders have seen delinquencies and charge offs remain at near record lows. All the companies in this segment saw double digit revenue and origination growth YoY. Lenders have started to raised borrowing rates, though not at the same pace as the Fed Funds Rate. The flattening yield curve has raised the cost of borrowing on credit facilities, causing margins for lenders and investors to be compressed.

Big banks experienced another strong earnings quarter as all covered in the report saw double digit increase in earnings. Revenue drivers vary from bank type to bank type. Big banks covered within the report saw deposits rise due to a better digital banking experience, an integration between wealth and banking products and a retail branch expansion. As a group the banks are growing, albeit slower than in the past, through digital means and are focused on the long term potential of products they are currently building.

Credit card issuers all saw their earnings grow by more than 20 percent YoY. Most card issuers also saw growth in revenue and their loan books. Growth in total allowances for losses outpaced loan growth, pointing to the fact that most card issuers see a credit normalization coming. Card issuers have used the partnership model with stores like Walmart, JC Penney and Lowes to grow revenues.

Overall economic health, low delinquencies and low charge offs show that the credit space is doing quite well. Though the report points out that most of these companies do not expect this environment to last forever, they are in the midst of preparing for a change while they keep growth humming along.

Filed Under: Peer to Peer Lending Tagged With: American Express, Bank of America, Capital One, Citibank, Discover, Enova, Goldman Sachs, GreenSky, JP Morgan Chase, lendingclub, Morgan Stanley, OnDeck, One Main Financial, PeerIQ, Synchrony, Wells Fargo

Views: 237

An Inside Look at the GreenSky-American Express Partnership

The multifaceted partnership is the first of its kind between a leading fintech platform and major credit card company

August 9, 2018 By Peter Renton 3 Comments

Views: 2,006

We heard on Monday that newly public fintech company, GreenSky, has partnered with American Express in a wide ranging deal. While we have seen some interesting fintech/bank partnerships over the last few years this is one of the most significant. It is also one of the first examples of a company that facilitates installment loans partnering with a large credit card company.

I reached out to both GreenSky and American Express to find out more. But before I get to our conversations there let’s tease out the three ways in which GreenSky is partnering with American Express.

  1. Select American Express merchants will be able to offer financing through GreenSky

American Express merchants will be able to offer GreenSky point of sale financing as an option for consumers. This will happen in the two main verticals where GreenSky operates: home improvement and elective healthcare. Merchants are able to offer financing through the GreenSky Merchant app available for Android or iOS.

  1. American Express consumer card members can apply for an installment loan

This is a pilot project that will be available in the home improvement category in five U.S. cities initially. Consumers will be able to apply for an installment loan through their American Express login. The technology for this program will be provided by GreenSky and development is still ongoing before this will be a production offering.

  1. Access to American Express vPayment

American Express vPayment is a virtual payments solution that provides a virtual account number for each transaction. In this system a token can be provided to a customer for a single use. This obviously makes the digital payment more secure and reduces fraud risk.

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: American Express, bank partnerships, GreenSky, Point of Sale Finance

Views: 2,006

An Overview of Small Business Loan Funding

We delve into the various ways small businesses can access capital.

December 19, 2016 By Todd Anderson 2 Comments

Views: 189

overview_small_business_funding

As non bank lenders continue to gain market share across different loan segments, we wanted to give a complete overview of online small business lending and how diverse the options are for all types of businesses today.

Understanding your company and where you fit within the ecosystem of small businesses is still the most important question you can ask. The options available vary in loan size, interest rates and term length dependent on the type of business you run. Though one thing is certain, today there is such a wide array of options available that most business owners should be able to secure funding.

SBA Loans

SBA or Small Business Administration loans are considered some of the best funding options available for their low interest rates, though their detailed paperwork and lengthy approval process tend to limit the types of firms who can secure these loans. There are three different types of loans offered by the SBA; 7(a) SBA Loan Program, CDC/504 SBA Loan Program and the less used Microloan Program. We will delve deeper below but these loans are designed for companies with very good credit, collateral and a solid business plan. The loans are not delivered directly by the SBA, the SBA acts as a guarantor so the banks can then allocate some of their small business lending to the SBA programs. Some of the top lenders in this space include Wells Fargo, US Bank and JP Morgan Chase; national, regional and community banks are the main lenders of SBA Loans.

7(a) SBA Loan

Loan Amount – $5,000 – $5,000,000
Loan Term – 5 – 25 years
Interest Rates – 6 – 13%

This is the most well known and most commonly used loan that the SBA program offers. This loan can be used to expand a company, finance equipment, purchase real estate or to make an acquisition. Businesses consider SBA loans as the top financing product to get approved for, however the process of applying and ultimately being approved is quite extensive. Companies need to provide financial statements, explanation of use of proceeds, details on collateral and full business descriptions. The process is still very similar to getting a traditional loan through a bank as the entire period can last about 90 days. [Read more…]

Filed Under: Peer to Peer Lending Tagged With: American Express, BlueVine, Can Capital, Funding Circle, Kabbage, MarketInvoice, OnDeck, small business lending, Square, StreetShares

Views: 189

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

  • LendingClub Receives Final Approval for its Acquisition of Radius Bank
  • Top 10 Fintech News Stories for the Week Ending January 16, 2021
  • Podcast 281: Sean De Clercq of Kickfurther
  • Upgrade Launches a Rewards Checking Account
  • Affirm’s IPO Takes Off Like a Rocket Ship

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