Yieldstreet Archives - Lend Academy

YieldStreet and LendingPoint Lead Fintechs on the Inc. 5000 List

The annual list of the fastest growing companies in the US features several fintech companies this year

August 14, 2019 By Peter Renton Leave a Comment

Every year Inc. Magazine releases a list of the 5,000 fastest growing companies in the country. They call it the Inc. 5000 and it is a celebration of the entrepreneurial spirit. You have to be a fast growing company to make the list.

The 2019 list was announced this morning, but before we get to the successful companies on the list, here is a look at the criteria Inc. set for the entrants:

Have generated revenue by March 31, 2015
Have generated at least $100,000 in revenue in 2015
Have generated at least $2 million in revenue in 2018
Be privately held, for profit and based in the U.S.
Be independent (not a subsidiary or division of another company).

There were 239 companies that made the list in the financial services industry. Leading the pack was YieldStreet, who came in at #14 overall, closely followed by LendingPoint who was at #17.

In a statement on the YieldStreet website, CEO Milind Mehere said:

We’re proud to be named by Inc. as the 14th fastest growing private company in the United States, capturing the #1 spot in both the New York and Financial Services categories. We owe so much of our success to our incredible community of dedicated Investors.

LendingPoint CEO and Co-founder, Tom Burnside, had this to say about their achievement (more here):

Our platform saw more originations in 2018 than in 2015, 2016 and 2017 combined and at the same time our credit performance improved allowing us to facilitate more financing for consumers online and at the point of sale. We are incredibly grateful to our customers and proud of the LendingPoint team.

If you filter the list for financial services companies there are dozens of fintech companies that most of you would recognize. Here is the top 10 in the category that shows their growth percentage as well as their 2018 revenue.

Update: After I published it was pointed out that FundThatFlip also ranked highly on the Inc. 5000 (at #42) but were classified in real estate, not financial services. Honorable mention to them as well.

My Quarterly Marketplace Lending Results – Q1 2019

My latest quarterly investment results show an overall 6.09% return for the year ending March 31, 2019

July 24, 2019 By Peter Renton Leave a Comment

Put this in the “better late than never” department. Yes, I know it is late July and I am only now just publishing my Q1 2019 returns. Thanks to those of you who reached out but rest assured I am still committed to sharing my results publicly and I apologize for the extreme tardiness of this update.

I am happy to report this quarter that my returns continue to improve. Since hitting bottom in Q2 of 2018 my returns have improved each quarter. Both LendingClub and Prosper showed their best returns in almost two years as the underwriting changes that were implemented in 2017 have had a positive impact.

Overall Marketplace Lending Return at 6.09%

My overall returns for the twelve months ending March 31, 2019 was 6.09%. This is up from 5.35% that I reported in Q4 and 4.77% in Q3. My original six LendingClub and Prosper accounts had another full percentage point jump. Last quarter I reported the returns on those six accounts had jumped from 3.19% in Q3 to 4.16% in Q4. We see this quarter they are at 5.18%. This is quite a remarkable turnaround and while I still think 5% is not a high enough return for unsecured consumer lending, it is certainly moving in the right direction.

One point to note is that I am liquidating my taxable accounts at LendingClub and Prosper. I have a little too much exposure to consumer credit in my overall portfolio and so I will be focused only on investing in my IRA accounts there. I am moving my redeemed cash into other marketplace lending accounts as well as other investments outside of fintech.

Now on to the numbers. Click the table below to see it at full size.

[Read more…]

The Future of Idle Cash Held at Marketplace Lending Platforms

As interest rates rise marketplace lending platforms should offer a return on cash waiting to be put to work

October 30, 2018 By Peter Renton Leave a Comment

The marketplace lending industry has never had to deal with an environment where interest rates are increasing. We’re not talking about how loan interest rates affect returns, but instead how platforms handle idle cash. When interest rates were close to 0% it was no big deal that platforms paid nothing for the idle cash that builds up in your account. But now that many money market and savings accounts offer 2% or more there has become a real cost to keeping cash just sitting in a marketplace lending account.

For some platforms this is not much of an issue since there are plenty of loans available and the minimum investment per loan is relatively low. But for many platforms, particularly in the real estate space minimum investments are high and cash builds up, sometimes to several thousand dollars before an investment can be made. These platforms may need to consider offering an incentive to investors to keep them happy.

YieldStreet Becomes First Platform to Offer a Return on Idle Cash

YieldStreet is one such platform. The minimum investment is often $10,000 or more in new deals so cash has to build up significantly before it can be reinvested. Also, with investor demand strong it is not easy to deploy idle cash since many of the deals are fully funded within minutes and there is no auto-invest feature. So, cash tends to build up and the cash drag problem has an impact on investors overall returns.

YieldStreet’s solution to this problem is YieldStreet Wallet which is a savings account that earns 1.6%. What’s interesting is that while you must be an accredited investor to invest in investment opportunities on the YieldStreet platform, this is not a requirement to hold a YieldStreet Wallet account. Similar to other savings accounts, users are restricted from making more than six transactions per month, deposits excluded. Funds are FDIC insured since the account is held at Evolve Bank & Trust which is an FDIC insured bank. One of the major benefits to investors is that they no longer have to worry about timing ACH transfers for new investments since the account is held at YieldStreet. Distributions and payments will also be made to the YieldStreet account so you automatically earning interest as loan payments come in.

My account was automatically upgraded to the YieldStreet Wallet and I have been earning 1.6% on my idle cash for over a month now. And for new transfers cash starts to earn interest as soon as the money is received.

Will Offering a Return on Idle Cash Become Standard Soon?

YieldStreet’s offering could be the start of a new trend. They are the first to address the problem of idle cash but they most certainly won’t be the last. The Federal Reserve is expected to increase interest rates three times in 2019 which will put the federal funds rate near 3%. As interest rates continue increase there will be more pressure on platforms to provide investors with a yield on their cash. Seems like a no-brainer to me to keep investors happy.

Invest Like the Top 1% With Institutional Grade Investment Offerings from Yieldstreet

An introduction to marine financing and more from high yield investment platform Yieldstreet

June 21, 2018 By Peter Renton Leave a Comment

I started investing on Yieldstreet about a year ago because I liked the unique investment offerings the company had. I invested in a pool of litigation finance loans, something I had never done before. Since then Yieldstreet has added some more unusual investments never before offered in marketplace lending. For more on Yieldstreet you should listen to my podcast from last year with CEO Milind Mehere.

I caught up with Milind again this week to talk about these new offerings and also to get an update on Yieldstreet’s progress. The first thing I wanted to talk about was the two unique investments they recently had on their website for marine financing. I should also note that Yieldstreet is available only to accredited investors at this time.

A First for Individual Investors: Marine Financing

First, let me tell you what marine financing isn’t. It is not recreational boat financing as Milind was quick to point out. These are commercial ships or to be more accurate Dry Bulk Ships designed to carry goods such as grain, coal, metals or forest products.

Yieldstreet purchased two vessels to be leased by a European ship management company. This is a somewhat complicated deal structure that Yieldstreet explains nicely in this tutorial on their website. In their first transaction they offered 8% interest on a 36-month loan term. The minimum investment was $20,000 and they filled the $18.1 million deal with just over 500 investors, many of whom had never invested on Yieldstreet before.