Joe Toms is the only person who has been a C-level executive at both Lending Club and Prosper. He was the managing director at LC Advisors, Lending Club’s registered investment advisor subsidiary from 2010 to 2011, then he left Lending Club to become the Chief Investment Officer at Prosper. He remained in that position until he resigned in February of this year.
I got to know Toms quite well during his days at Prosper and have kept in touch with him since he left. He is one of the most knowledgeable people in this space and I was curious what his next more would be. In a phone conversation yesterday he filled me in on Freedom Financial Asset Management (FFAM is a division of Freedom Financial Network LLC) where he is now President and Chief Investment Officer. In January they are launching FreedomPlus, a new consumer lending platform.
So what is FreedomPlus? Is it a new p2p lender? No. But it will be originating consumer loans for investors. It will not feature a marketplace like Lending Club or Prosper but it will be open to accredited investors to invest in pools of loans.
The big news for their launch is the announcement today of a $125 million investment from Vulcan Capital, which is Paul Allen’s (the Microsoft co-founder) family office. This money will be used to invest in consumer loans originated by FFAM and marks one of the largest investments ever made by one investor in the online consumer lending space.
Catering to “Emerging Prime” Borrowers
What kind of borrowers is FreedomPlus focused on? When I asked this question Toms gave quite a lengthy answer. First, he pointed out there are approximately 80 million people in this country with a FICO score of between 600 and 749. Of these around half will remain stable or improve their credit score in the coming 12 months. These are the people that FreedomPlus will be targeting, a group he calls “emerging prime” borrowers.