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Marketplace Lending Predictions for 2017

My annual gaze into the crystal ball brings you seven predictions for 2017 as well as a review of my last year's predictions.

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Crystal ball - 2016 predictions

Happy New Year everyone. As I do every year at this time I make a few predictions for the year ahead as well as review my previous years predictions.

Review of my 2016 Predictions

As we know 2016 turned out in a way that was completely unexpected. Regardless, I will go through what I thought would happen in 2016 – some things I got right and with others I was way off.

  1. Lending Club will launch an auto lending operation this year
    Despite the challenges at Lending Club in 2016 I did get this one right. They launched a new auto lending operation in October in their first new product expansion in more than two years.
  2. Consolidation will begin
    I was not really right with this one. While consolidation did begin somewhat in 2016 my suggestion of three platforms buying acquired by larger competitors did not really come true. We saw several platforms go out of business but only one or two minor acquisitions.
  3. There will be five IPOs in our industry in 2016
    I was embarrassingly wrong on this one. I expected the IPO market to rebound in 2016 and several of the large platforms to take advantage of the public markets. I was completely wrong with zero IPOs in our industry in 2016.
  4. Three large banks will build platforms
    I was pretty much right on this one. We had Goldman Sachs launch their Marcus platform in 2016 and we also saw Wells Fargo launch their Fastflex product for online small business lending. While outside the US, German banking giant Commerzbank launched their own online lending platform.
  5. A Chinese company will buy a U.S. marketplace lending platform
    This did not happen in 2016 although interest in the US marketplace lending industry in China has never been stronger. I think I was probably a couple of years early on this prediction.
  6. The retail investor will become more in favor in 2016
    The retail investor certainly became more in favor this past year. There were some new Reg A+ deals announced and Lending Club made several moves aimed at increasing retail investor volume including the one just last month providing bonuses for new IRA investment.
  7. A new trade association will finally launch
    This was an easy one to predict as many of the leading companies have been talking about it for some time. The Marketplace Lending Association launched in April and we had several other initiatives launch as well.

[Read more…]

Marketplace Lending Predictions for 2016

I stare into my crystal ball and provide predictions for the year ahead as well as review my predictions from one year ago.

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Crystal ball - 2016 predictions

Happy New Year everyone. Here is my annual predictions post where I review my previous years predictions and make some new ones for the new year.

Review of my 2015 Predictions

  1. Lending Club will issue $10 billion in new loans and Prosper $4.1 billion
    I was a bit optimistic on my loan volume predictions. While both companies had a great 2015 Prosper came in at $3.7 billion for the year, below my $4.1 billion projection. We won’t know Lending Club‘s final numbers until their next earnings call in a few weeks but we do know that they did $5.8 billion through Q3. So, if they keep a similar growth rate to previous quarters I would expect around $2.5 billion in Q4 for $8.3 billion in total loans for the year. Still a great year but below the aggressive numbers I projected.
  2. Prosper will remain a private company
    I got this one right. Prosper remained a private company with not even a whisper of an IPO for them in 2015.
  3. There will be two new marketplace lenders completing an IPO
    This one I got completely wrong. Given the state of the IPO market today compared with 12 months ago it is not surprising that no other U.S. based marketplace lending went public in 2015.
  4. A new platform will launch targeting non-accredited investors
    I was only partially right on this one. While several new platforms contacted me throughout the year with their intention to launch for retail investors the only offerings that actually launched in 2015 were from existing real estate platforms Groundfloor and Fundrise.
  5. A midsize bank starts their own marketplace lending platform
    This was an interesting one. While I also did not get this one right there was more talk about the banks role and response to our industry in 2015 than ever before. We did see news break in June about the intention of Goldman Sachs to create their own platform but nothing has materialized on that front yet. I think I was just a year early on this (see prediction #4 below).

I also predicted that Lending Club would make two acquisitions and I was dead wrong on that as well. Lending Club is biding their time on acquisitions but clearly they will grow their borrower base at some point through acquisitions. I am confident that the predictions I got wrong will all come true in the near future, some in 2016 as you can see below.

My 2016 P2P Lending Predictions

Now on to this year. I am going to see if I can improve on my somewhat dismal performance from 2015. Here are several predictions I feel confident making for 2016. [Read more…]

Five Predictions for 2015

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Crystal ball - 2015 predictions

Happy New Year everyone. Here is my annual predictions post where I review my previous years predictions and make some new ones for the new year.

Review of my 2014 Predictions

  1. Lending Club will issue $5.3 billion in new loans
    With Lending Club no longer providing timely updates on their loan book we will not know exactly how much they issued in 2014 for quite some time. But I am confident that my $5.3 billion number was overly aggressive. We do know that in the first nine months of 2014 Lending Club issued $2.96 billion in new loans. So, even if they have a breakout fourth quarter I expect they will be under $4.5 billion in total originations for 2014.
  2. Prosper will issue $1.1 billion in new loans
    The opposite happened on my Prosper prediction. Prosper’s growth was far more than I, or anyone else for that matter, expected. They ended the year with $1.6 billion in new loans issued up from just $357 million the previous year.
  3. Google launches a joint venture with Lending Club around Google Wallet
    I was completely wrong on this one. While the official word is that Google and Lending Club are “working together” to develop something no timetable has been set and we may see nothing here for quiet some time.
  4. Mobile becomes widespread for both online consumer and business lending
    While I think mobile use is increasing, particularly on the borrower side, to say it has become widespread today is probably an overstatement. Ron Suber, the president of Prosper, talked often last year about the importance of a mobile strategy for lending platforms but we still haven’t reached a turning point here yet.
  5. Prosper will be profitable by Q3 2014
    I am happy to report that I was right on this one. Prosper turned profitable in the third quarter last year.

I also predicted that Lending Club would have a successful IPO in 2014 although I expected it was going to happen in the first half of the year. But given the public intentions of Lending Club it was a bit of a stretch to call the Lending Club IPO an actual prediction.

My 2015 P2P Lending Predictions

Now on to this year. Let me look into my crystal ball and give five predictions for the coming year. [Read more…]

Five P2P Lending Predictions for 2014

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Predictions for p2p lending in 2014

Happy New Year everyone. Here is my third annual predictions post where I review my previous years predictions and make some new ones for the new year.

Review of my 2013 Predictions

  1. Lending Club will issue $1.62 billion in loans in 2013
    Clearly I underestimated Lending Club on this one. As I said one year ago I expected the growth rate to slow down at Lending Club in 2013 from the 179% year over year growth experienced in 2012. Clearly I was wrong here. Their growth rate actually accelerated to 188% in 2013.
  2. Prosper will issue $340 million in loans in 2013
    I was a lot closer on my Prosper prediction with the actual loan volume coming in at $357 million. I have to admit, though, after their slow start to the year I thought my prediction was going to end up being overly optimistic. But Prosper had a phenomenal fourth quarter that exceeded everyone’s expectations.
  3. The Prosper class action lawsuit is settled
    I am happy to report that I was right on this one. The Prosper Class Action lawsuit that was brought in 2008 was settled in July for $10 million payable over three years.
  4. Peer to Business Lending will boom with at least five new companies
    I think I was right with this prediction as peer to business lending did indeed boom in 2013. I reviewed several new small business lenders on the blog including Funding Circle USA (formerly Endurance Lending Network), P2Binvestor, Funding Community and Dealstruck. Other platforms that launched in 2013 were Fundation and Quarterspot (review coming shortly).
  5. Lending Club will release a bankruptcy remote vehicle for all investors
    I was completely wrong here. Lending Club made no movement towards creating a bankruptcy remote vehicle for all investors. I think the fact that they are now profitable and in a very strong financial position has probably made this less of a hot button with investors.

My 2014 P2P Lending Predictions

Now on to 2014. Let me look into my crystal ball and give five predictions for the coming year. [Read more…]

My Top Five P2P Lending Predictions for 2013

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Happy New Year everyone. I hope 2013 is treating you well so far. On January 1st of 2012 I made five predictions for p2p lending in 2012, so now it is time to go back and review how I did. I will also make five new predictions for 2013.

Review of my 2012 predictions

  1. Lending Club will reach $1 billion in total loans – this was by no means a certainty as we started 2012 but I expected Lending Club would break this milestone in December. They did it a month earlier.
  2. Prosper will reach $500 million in total loans – Prosper ended the year at $443 million in total loans issued since inception, so I was a bit too optimistic on this one.
  3. Lending Club will post a profitable quarter – this one probably has come true but we will have to wait a while to know for sure. In the third quarter of 2012 Lending Club posted a quarter where they were cash flow positive and I expect they will carry that momentum over to the last quarter and show profitability for the first time.
  4. A third competitor will take on Prosper and Lending Club – I was completely wrong on this point as no real competitor emerged in 2012. Peerform are still around but they are only available to accredited investors and they were pretty quiet this year – they are not a direct competitor at this stage.
  5. More states will become available for investors – there was no movement here whatsoever as the number of states available to investors at both companies remained static.

My 2013 p2p lending predictions

So now we move to this year. I have a feeling that 2013 is going to be a great year for p2p lending investors. Returns will continue to be good and the industry will maintain the solid growth of the past couple of years. So, here are my top five predictions for this year. I will be sure to check back in 365 days to see how I did.

  1. Lending Club will issue $1.62 billion in loans in 2013
    I expect the incredible growth rate of Lending Club in 2012 (179% year over year growth) to slow down somewhat in 2013. Still, with investor money continuing to pour in and an IPO on the horizon I expect another stellar year. But I am predicting the growth rate to fall to around 120-125% in 2013.
  2. Prosper will issue $340 million in loans in 2013
    Despite a very rough fourth quarter of 2012 I expect Prosper to have a much better year in 2013 and their growth rate should increase over 2012. But they will remain a distant number two in the p2p lending race.
  3. The Prosper class action lawsuit is settled
    A class action lawsuit was filed against Prosper in November 2008 that has been dragging on now for over four years. I believe that in 2013 this lawsuit will be finally put behind us. If Prosper does not win the suit, I think it will be settled anyway. Either way, the matter should be put to bed in 2013.
  4. Peer to Business Lending Will Boom With at Least Five New Companies
    In the UK peer to business lending is booming, but in the U.S. there are still virtually no companies (aside from U-Haul) that allow individuals to lend money to companies on an easy to use platform like Lending Club or Prosper. I think that will change in 2013. While the JOBS Act will allow equity investing for the masses, I am only talking about debt – loaning money to businesses. I think this cousin of p2p lending will boom in 2013.
  5. Lending Club will release a bankruptcy remote vehicle for all investors
    With LC Advisors, Lending Club has had a bankruptcy remote vehicle for large investors for some time. But retail investors have enjoyed no such protection. I think with the recent approval of Prosper Funding LLC, Lending Club will provide something similar to all investors in 2013.

What do you think? Do you have any predictions of your own. As always I would like to hear your comments.

My Five P2P Lending Predictions for 2012

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Happy New Year! I hope you enjoyed the arrival of the new year last night whatever you did. As for me, I am getting ready to go on a big trip, so it has been a busy holiday weekend for me. Tomorrow, my family is flying to Sydney (my home town) for an extended visit. So, you won’t be hearing much from me for several days until after we get settled in.

Here on the first day of 2012 the entire year lies before us, full of possibilities. So I have spent some time peering into my crystal ball to come up with five p2p lending predictions for 2012.

1. Lending Club Will Reach $1 Billion in Total Loans

Lending Club closed 2011 with $460 million in total loans issued since their inception in 2007, more than half of which were issued this past year. I expect they will issue around $550 million in new loans in 2012 bringing their total loans issued to over $1 billion. The high watermark in new loans issued will be somewhere just over $60 million a month, roughly double what they did in December, 2011.

2. Prosper Will Reach $500 Million in Total Loans

Prosper will also keep their growth record going albeit with smaller numbers than Lending Club. Prosper issued $75 million in loans in 2011 to bring their total since inception to $290 million. I expect 2012 to be a banner year for Prosper with a three-fold increase in volume from 2011. This should take them past $500 million in total loans issued with a high watermark in monthly volume of around $24 million. [Read more…]

About Lend Academy

Lend Academy has been bringing you all the news and information about peer to peer lending since 2010. Founded by Peter Renton, Lend Academy not only has the most active news site, but also the largest online forum and the first and most popular podcast in the industry.

The Lend Academy team loves peer to peer lending and our staff have all invested their own personal money in one or more of the platforms. Lend Academy Media is part of Cardinal Rose Group which also owns LendIt, the leading industry conference, and has a majority interest in NSR Invest.

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