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LendIt Fintech News: Daily Coverage of Fintech & Online Lending


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Ocrolus Maps the Fintech Lending Ecosystem

The 2020 Fintech Lending Market Map will become a great new resource for the industry

August 31, 2020 By Peter Renton 1 Comment

Views: 1,242

Those of us who have been around the online lending space for a while will remember the “Lendscape” created by Orchard Platform (now part of Kabbage). It was a very useful infographic featuring all the major players in the online lending ecosystem. I used to refer to it on a regular basis whenever I wanted a complete picture of a segment of our ecosystem. It was last published in 2017 and I have missed having access to an up to date resource like this. We had even talked about internally at LendIt Fintech about recreating something like it. Now, we don’t have to.

Earlier this month Ocrolus released the 2020 Fintech Lending Market Map. While it is not an exact replica of the Orchard Lendscape it is a super useful resource. The big difference is that they ignore the investor side of the online lending space and bring in more of the technology and infrastructure companies. This makes sense given that Ocrolus is a technology company building the infrastructure to analyze documents and automate back office tasks and is used by many of the leading online lenders.

I caught up with David Snitkof, former co-founder at Orchard and now the Head of Analytics at Ocrolus, a position he has held since April. What was interesting to me is that this new market map of the fintech lending ecosystem was not actually his idea. He said there were many people at Ocrolus who were also big fans of the old Lendscape and were keen to resurrect it. Obviously, David would have been a great resource for Ocrolus and he did in fact have significant say in to how it was was produced.

When looking at the full infographic I am struck by how far our industry has come in the last decade. While we have certainly had our challenges, the innovations that were pioneered by a select group of companies a decade or more ago have led to loans now becoming a standard online offering. You will see several of the largest banks in the country on this infographic as they have integrated online lending into their business.

Now, not every company is listed and some companies maybe should not have made it in. But overall, Ocrolus has done the industry a great service by creating the most complete market map of fintech lending in several years.

Filed Under: Fintech Tagged With: fintech lending, infographic, market map, ocrolus, Orchard

Views: 1,242

It’s Official: Kabbage To Acquire Orchard

The tech focused small business lender, Kabbage, has announcement the acquisition of Orchard, the leading loan analytics provider in the online lending space

April 26, 2018 By Peter Renton 1 Comment

Views: 933

It was the worst kept secret in fintech. There were rumors flying around during LendIt Fintech earlier this month and then Bloomberg published this story a couple of weeks ago about the pending deal. Well, today it became official. In a press release this morning it was confirmed that Kabbage, the leading tech-focused small business lender, will acquire Orchard.

I met Matt Burton, the CEO and Co-founder of Orchard, at the very first P2P lending meetup in New York in early 2013. This was before Orchard even existed but right away it was clear that we both shared a true passion for the burgeoning online lending space. I invited Matt and his fellow co-founder, Angela Ceresnie, to speak at the very first LendIt in June of that year. I still remember their presentation on institutional investing and how they were building tools to make the investing process easier. Orchard was officially founded in August 2013 and since then they have gone on to become the leading connector of capital between loan originators and institutional investors.

It was back in February when I first heard rumors that Orchard was for sale. I was a bit surprised because they had closed a $15 million Series C just a few months before. They had also recently released their new Deals platform to facilitate both primary and secondary market loan transactions. But from what I have heard, and the Bloomberg article seems to confirm this, their new platform has failed to get the traction they had hoped.

So, what will become of Matt Burton and his team? Some clues are provided in the press release:

Orchard’s CEO and co-founder, Matt Burton, as well as Chief Analytics Officer and co-founder, David Snitkof, will both join Kabbage in leadership roles upon the closing, helping oversee technology integrations and future innovations. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: acquisition, Kabbage, Orchard

Views: 933

Orchard Launches New “Deals” Platform Connecting Institutional Investors and Originators

In an industry first, Orchard Deals is helping facilitate both primary and secondary market transactions

September 12, 2017 By Peter Renton 2 Comments

Views: 1,109

[Update: There will be a webinar at 11am ET on September 27 on the The Orchard Deals Platform brought to you by LendIt and Crowdfund Insider. Details here.]

When I first invited Orchard Platform CEO, Matt Burton, on the Lend Academy Podcast back in 2014, we talked about their ambitions around launching an institutional secondary market for marketplace lending. It has proven to be a massive undertaking and it has taken several years longer than anticipated but with the launch of Orchard Deals today it has now become a reality.

To be clear, Orchard’s new platform is far more than just a secondary market. It has several new features:

  1. Deals – Pre-qualified investors can browse listings of a range of different investment opportunities offered by originators.
  2. Capital Management – For originators to help monitor and optimize capital utilization across multiple funding sources.
  3. Advanced Analytics – Benchmarking of performance data against an anonymized peer group.
  4. Data Services – Helping originators improve the quality of their data and client reporting.
  5. News & Insights – Industry news and economic data as well as Orchard’s own research and commentary.

I spoke at length with Orchard CEO, Matt Burton, yesterday to get more insight into the new Orchard Platform. The first thing that Matt stressed is that the entire Orchard Platform has been redesigned from the ground up and is a far more robust product than anything they have had before.

The New Orchard Deals Platform

The key piece that I was interested in was the new Orchard Deals platform. The old Orchard Platform provided technology solutions for both originators and institutional investors but Deals is the piece that finally connects the dots. The platform connects institutional investors with origination platforms that have listed specific investment opportunities. Orchard has 55 institutional investors registered on their platform and 25 originators (with several more in the queue). Originators cover the gamut of consumer, small business and real estate lending.

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: institutional investing, Orchard, secondary market

Views: 1,109

What the Orchard & Sandler O’Neill Deal Means for Bank Partnerships

We look into one of the latest bank partnerships in online lending, this one with data and analytics provider Orchard.

January 20, 2017 By Todd Anderson Leave a Comment

Views: 947

Sandler_ONeill_Orchard_Partnership

Orchard recently inked a partnership deal with investment bank and broker dealer Sandler O’Neill to provide their bank and specialty finance clients access to the Orchard platform. Orchard provides an integrated platform that helps to connect online loan originators and investors with access to a variety of web-enabled tools, including market data, benchmarking, investor reporting, portfolio analytics, and cash flow simulators, as well as capital markets software.

Sandler O’Neill’s network of community banks, thrifts and specialty finance institutions will now be able to access the online lending asset class. Orchards network of originators will give these institutions a diverse group of choices so they can better understand where to allocate their capital.

Online lending has seen a surge in bank partnerships the last two years and it does not look like stopping anytime soon. 2017 looks to be the year of the bank partnership and deals like Orchard/Sandler O’Neill can only help to accelerate this trend. While the initial partnership will help Sandler’s clients allocate capital, the more interactions that traditional institutions have with emerging fintech companies the more possibilities emerge.

“Many banks and specialty finance companies are ramping up their exploration of online lending to start 2017,” said Orchard’s Chief Commercial Officer Bill Ullman. “While some are just beginning to look and to make sense of this emerging space, others are deciding on the best tools to start making an allocation. Working with Sandler O’Neill, Orchard is providing them the expertise and data to begin evaluating and monitoring the wealth of opportunities that exist across the online lending market.”

Big incumbent banks have a lot of resources at their disposal. Being able to evaluate, partner or even build their own solutions is a luxury that small firms just do not have. Using a firm like Orchard to help provide access to this emerging asset class allows for the small institutions to be a lot more efficient when looking to interact and deploy capital.

Lend Academy has been keeping a tally of fintech/bank partnerships that you can view here; as the chart points out the types of bank partnerships can vary in scope and size. Community banks and special finance institutions can benefit greatly from a partnership, though they are unable to spend the necessary time to research all of these emerging companies. This is where the partnership of Orchard and Sandler O’Neill comes in, while it is still early days, the potential for a whole host of partnerships is an exciting piece of news for the market.

Filed Under: Peer to Peer Lending Tagged With: bank partnerships, Orchard, Sandler O'Neill

Views: 947

Momentum Continues: A Vote of Confidence for Online Lending

Matt Burton, the CEO and Co-Founder of Orchard shares his perspective on the current state of online lending.

September 16, 2016 By Ryan Lichtenwald 1 Comment

Views: 6

orchard_guest_post_momentum_continues_online_lending
[Editor’s note: This is a guest post from Matt Burton, CEO and Co-Founder of Orchard.]

The past nine months have seen a serious uptick in volatility in our nascent online lending industry.

News of potential conflicts of interest at Lending Club, investor pullback, and staffing reductions at Avant and Prosper are giving some people pause. But is this pessimism really called for? Is fintech really riding for a fall, or have the media and the market been caught up in a news cycle that doesn’t actually match the reality on the ground? From where I sit, I’d say that the latter is very likely the case.

The truth of the matter is that most industries have to weather periods of volatility like this in order to mature. It may not be comfortable in the short term — and in hindsight, the problems may have been avoidable — but it tends to make industries stronger and more resilient in the long run.

We believe that the most significant cause for collective concern — the shakeup at Lending Club — has unduly served as a proxy for the state of the overall industry. And although many online lenders have suffered to varying degrees as a result of the fallout from those events, most are showing signs of recovering. Only one lender, Vouch Financial, has shuttered. Not what you would have expected based on the doom-and-gloom reporting around the industry.

Online lending is still unique in its ability to meet the demands of the modern consumer and investor by making credit products more accessible, transparent, and customizable. Those capabilities are baked into the DNA of the industry as a whole and can’t be easily removed.

To keep things in perspective, it’s important to remember that the transparency and flexibility that make online lending so appealing to so many individuals and institutions remain unchanged. That isn’t to say, however, that there haven’t been lessons coming out of our industry’s recent troubles.

Underwriting practices, for example, are being reconsidered. Tighter lending guidelines, while reducing some borrowers’ access to credit, will, in the end, result in stronger loan performance for investors. Appealing to investors in this way will allow online lenders to broaden the pool of capital available to their higher quality and more thoroughly-vetted borrowers. The result is a virtuous cycle that is in everyone’s best interest. [Read more…]

Filed Under: Peer to Peer Lending Tagged With: Matt Burton, online lending, Orchard

Views: 6

Orchard Announces Data Partner Program

Orchard's new program will allow originators to compare their loan book with that of their competitors.

September 12, 2016 By Ryan Lichtenwald Leave a Comment

Views: 4

Orchard Logo

Orchard, who specializes in connecting originators with investors today announced the Orchard Data Partner program. Orchard has tracked originators on an anonymized basis for quite some time (as seen in their latest consumer lending report), but the new data partner program is a little bit different.

Qualifying originators will now be able to analyze and compare loan performance to their competitors and also share their own data with capital partners. Data is standardized and anonymized. Originators benefit by knowing their datasets are verified and complete and investors benefit by having access to standardized data across assets classes and originators. This also assists investors in the due diligence process.

Currently, the Data Partner Program tracks over $33 billion in originations. Orchard performs quality assurance checks and sends reports to originators to proactively check for issues. If any issues are found in the underlying data, Orchard works with the originator.

According to Matt Burton, CEO of Orchard:

This is a game-changer for our origination partners, because they now gain assurance that their datasets are verified and complete, while investors gain access to consistent and standardized datasets. The due diligence process that originators face when dealing with institutional investors has become more difficult and time-consuming. The Orchard Data Partner Program supports their ability to maintain investor confidence and execute with greater transparency at scale.

The other big piece of this announcement relates to the investors. Carlos Nogueira, an investment team member at VanEck Associates Corporation stated:

The ability to seamlessly access standardized loan-level data from originators through Orchard can support investors’ ability to seek to transact more efficiently. We are big supporters of online lending and are pleased to see the ecosystem mature in a robust manner that provides enhanced disclosure and insights.

Conclusion

Orchard has been very successful at attracting originators and this new program will further promote originators to jump on board if they haven’t already. For originators there is a big benefit to being able to benchmark themselves against their competitors. The creation of the Orchard Data Program also gives more transparency to investors and further solidifies Orchard as the place to go to explore opportunities and evaluate platforms.

Filed Under: Peer to Peer Lending Tagged With: Data Partner Program, Orchard

Views: 4

Orchard Report Highlights Unsecured Lending Trends For Q2 2016

Orchard shares insights on charge offs, originations and interest rates in their latest industry report.

August 25, 2016 By Ryan Lichtenwald Leave a Comment

Views: 19

Out of all the service providers in the marketplace lending industry Orchard has the broadest set of data on online lenders here in the US. Orchard serves as a platform to connect originators looking for capital with institutional investors who are seeking opportunities in the space and they have data feeds to many of the leading originators. Today, they released their Q2 industry report focusing on consumer unsecured lending. Although Orchard doesn’t break down the originators included, the report should serve as a view of market level trends as opposed to trends by any one originator.

Originations has been the hottest topic as of late as Lending Club and Prosper shared their Q2 results. More broadly the report highlights originations down approximately 34% from Q1 2016 and down 16% from Q2 2015. Below is a chart of quarterly originations since Q3 2013.

Unsecured_Marketplace_Lending_Originations_Q2_2016

Orchard also shared that 2014 vintage charge offs have increased compared to some previous vintages. Although we saw some pockets of underperformance last year with Lending Club, Orchard also notes that this trend is also in part due to the increase of subprime loan origination platforms.

Unsecured_Lending_Charge_Offs_Q2_2016

The final piece of the report shares data on interest rates, both average interest rates and interest rates by loan size. Q2 2016 saw a significant increase in average borrower interest rate to 16.4%, up from 15.5% in Q1 2016. The increasing average interest rate is not surprising given the fact that both Lending Club and Prosper have raised rates several times over the last few quarters and we can assume some other lenders are doing the same to attract investors. However it is surprising to see a 72 bps drop in average interest rates in Q1 2016. We see the trend of increasing average rate first begin in Q2 2015 and continues to increase quarter over quarter until the drop off in Q1 2016.

Unsecured_borrower_interest_rates_q2_2016

Conclusion

We are well aware of trends from leading originators Lending Club and Prosper. Lending Club is a public company so we have insight into their operations and Prosper files quarterly with the SEC even though they aren’t public. However, there are many other originators who are private companies and do not share information publicly. This report from Orchard gives us a broader perspective of what trends are happening in the unsecured consumer lending market. You can view the full report on Orchard’s website.

Filed Under: Peer to Peer Lending Tagged With: consumer, Industry Report, Orchard, Unsecured

Views: 19

Orchard Marketplace Lending Index to be Included on Bloomberg Professional Service

The consumer lending index from Orchard shows performance and growth rates dating back to 2011 for the two major platforms.

November 18, 2015 By Ryan Lichtenwald Leave a Comment

Views: 1,094

OrchardMarketplaceLendingIndex

Today, Orchard announced that their Orchard US Consumer Marketplace Lending Index will be distributed on the Bloomberg Professional Service. The index measures the performance of consumer online lending and tracks the overall performance of the aggregate amount of loans originated through various platforms. The Orchard index is currently the only one available for the US market and data is available starting from 2011. The index is based on data from the two largest consumer marketplace lenders: Lending Club and Prosper.

Subscribers to Bloomberg will now have access to the marketplace lending index and will be able to download the data. Besides market performance the index includes other key indicators such as charge-offs and industry growth rates. Platforms that meet certain criteria are added to the index and several are slated to be added in the next 12 months.

Matt Burton, CEO of Orchard, stated: [Read more…]

Filed Under: Peer to Peer Lending Tagged With: Bloomberg, Index, marketplace lending, Orchard

Views: 1,094

Overview of P2P Automation and Analytics Sites – Part 1

February 17, 2015 By Ryan Lichtenwald Leave a Comment

Views: 1,171

There is an ever increasing number of websites dedicated to aiding in analytics and investing in Lending Club and Prosper. In this comprehensive two-part series we will look at all of the popular tools that investors use today (there are ten in all) in order to backtest strategies, automate their investments and analyze data. Analytics and data has been a large part of p2p lending from the start and investors are always looking for an advantage to potentially maximize returns. Investment automation allows for a much better investment experience versus selecting notes on the platform by hand.

 

Nickel Steamroller logo
Nickel Steamroller has been around since mid 2011 and eventually merged with ProsperStats to bring Prosper and Lending Club data analytics into one single platform. With their site, you can back-test investment strategies and see how certain strategies would have fared over time. (Click of any of the images in this post to view them at full size.)

LendingClub Back Testing

In the Results Options tab, you are able to further breakdown your strategy to look for other opportunities to increase ROI. For instance, a commonly used filter in the past has been to simply filter on inquiries. The below is the filtered breakout for loans that were issued before the end of 2013. [Read more…]

Filed Under: Peer to Peer Lending Tagged With: data analytics, lendingrobot, Nickel Steamroller, Orchard, p2p analysis, Peer Lending Server, PeerCube

Views: 1,171

Orchard Lands a $12 Million Investment from Some of the Industry’s Biggest Names

October 21, 2014 By Peter Renton 2 Comments

Views: 963

Orchard building out the online lending ecosystem

When I profiled Orchard back in February, the company was just a few months old and fresh off a $2.7 million funding round. But that wasn’t your typical seed round—Orchard attracted the likes of Vikram Pandit, the former CEO of Citigroup and Tom Glocer, the former CEO of Reuters as investors in that round.

While that was impressive, today they have announced a $12 million funding round from a group of A-list players in our industry. These are people with deep histories and intimate knowledge of the inner workings of p2p lending. But before I get to that, a quick primer for those of you who don’t know Orchard.

Orchard Platform traces its roots back to the LendIt Conference in 2013 where co-founders Matt Burton and Angela Ceresnie presented on some of the challenges facing p2p investors. This led them to create the first company devoted to providing the infrastructure that connects institutional investors with loan originators. They started with Lending Club and Prosper and now connect multiple platforms to their growing investor client base. They provide institutional investors with real-time trading and reporting, investment strategy, data analysis as well as access to loan supply.

I caught up with Orchard CEO Matt Burton earlier today to discuss this new funding round and the names that participated.

“We went out trying to get one or two big names into this round,” said Burton. “We had more interest than we expected and we ended up with many big names.”

Who are These New Investors in Orchard?

[Read more…]

Filed Under: Peer to Peer Lending Tagged With: funding, institutional investing, marketplace lending, Orchard

Views: 963

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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.

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