Bank ING Diba acquires p2p lending marketplace Lendico. According to Finanz-Szene.de the transaction was reported to the German Federal Cartel Authority last week. The bank has confirmed the acquisition.
Lendico went through hard times. It had to cut back on international activities, never really took off on German home turf and realigned from consumer lending to SME lending. Last year the majority stake was sold from Rocket Internet to Arrowgrass.
Speculation is that the bank acquired Lendico in a make or buy decision to save development time for an own platform, which could have taken over a year. While the price of the acquisition was not disclosed, I suspect Lendico could have come cheap, considering the lingering of the business in the past years.
The German market is a tough market for p2p lending services to succeed. Few companies run a p2p lending marketplace model. One of the earliest players, Smava pivoted already in 2012 and now brokers bank loans.
We last reported on Lendico refocusing on SME loans instead of consumer loans in Germany. Sinces then there is more negative news. Sources say that Lendico was in talks with Spanish bank BBVA, but failed to close a financing deal. In December several employees left the company. Lendico said that these were normal fluctation and that the Lendico group has more than 100 employees.
Documents accessed by P2P-Banking.com show that the largest (by loan volume) German p2p lending marketplace Auxmoney made an operating loss of 13.1 million EUR in the year 2015 (compared to 8.48M loss in 2014). This was before receiving Series D funding in early 2016.
Funding Circle CE, Berlin, the German division of Funding Circle closed 2015 with an operating loss of 9.45 million EUR (compared to 2.83M loss in 2014).
Germany seems to be a very hard market for p2p lending companies to crack. Interest rate levels for consumer loans are very low compared to other markets. banks are competitive. And there is no significant amount of credit card debt that can be refinanced. P2P Lending marketplaces cannot offer better interest rates, they need to find other competitive advantages. And customer acquistion costs to win borrowers through online marketing channels are high in Germany.
While Lendico never published monthly origination volumes, Auxmoney and Funding Circle CE stopped making monthly figures available early in 2016. The latest publicly accessable figures were 10.6 million EUR new loan originations for Auxmoney in January 2016 (ranking in Top 6 of Europe’s marketplaces) and 0.8 million EUR for Funding Circle CE in June 2016.
Funding Circle has said that it will use part of the funds of the recent 100M US$ round to consolidate its position. It will be interesting to see if this results in higher activity in Germany as they announced to concentrate their continental focus on the Netherlands and Germany while stopping to issue new loans in Spain.
Without any public announcement Lendico has stopped to originate new consumer loans in the German market sometime in the past weeks (months?). Instead it has embedded a loan application tool of Finanzcheck in the Lendico website and refers interested borrowers to this company. Lendico told inquiring investors that the company will focus on loans to businesses in Germany. As far as I know, Lendico has not published any recent figures on loan volume origination. On Dec. 7th, 2016 Rocket Internet SE published its financial report for the first half of 2016. There is a short mention that Rocket Internet SE has booked a ‘Wertminderungsaufwand’ (own translation: decline in value) of 19.482 million EUR for the corporate holding of Lendico.
Two months ago Lendico stopped issuing consumer loans in the Netherlands. Earlier the company stopped issuing new loans South Africa. The status of the Lendico operation in Austria seems unchanged to me – at least the website is unchanged and allows applications for consumer loans in Austria.
Lendico announced today that it will stop originating new consumer loans in the Dutch market and focus on loans to companies.
Lendico biedt vanaf 1 november tijdelijk geen consumentenkrediet meer aan. … Vanaf 1 november kunnen alleen bedrijven nog een lening aanvragen. … Product details zakelijke lening: Kredietbedrag: € 10.000 tot € 250.000 Rente vanaf 3,79% Looptijd 6-60 maanden Een aanvrager is gekwalificeerd als het bedrijf meer dan 2 jaar bestaat en in de afgelopen 2 jaar meer dan € 50.000 omzet had. Waarom stoppen we tijdelijk? Sinds we in september 2014 op de Nederlandse markt actief zijn hebben we een veelheid aan verschillende producten ontwikkeld die op de website of voor geselecteerde partners beschikbaar zijn. We willen ons productaanbod de komende maanden herijken en een beperkt aantal producten verder automatiseren en doorontwikkelen. Om dat in alle rust te doen, hebben we besloten om het consumentenkrediet volledig te pauzeren tot minstens januari 2017.
PostFinance one of the largest five retail banking institutions in Switzerland will partner with Lendico to launch joint venture Lendico Schweiz, which will facilitate loans to SMEs in Switzerland.
From the last quarter of 2016 onwards, the company will facilitate crowdfunding for small and medium-sized enterprises (SMEs) in Switzerland. It is entering the market in close collaboration with PostFinance, a subsidiary of postal carrier Schweizerische Post.
Together the partners would like to establish a new form of SME financing in Switzerland. The aim of the joint venture is to provide the numerous Swiss SMEs with a modern alternative to traditional bank financing. The two partners are contributing their complementary expertise in customer contact and the entire lending and repayment process to the joint venture.
Sources say PostFinance was barred by regulation to directly lend to SMEs and had to find a third party partner to enter this market.
‘With 110 years of experience in Swiss banking services and around three million customers, we can think of no better partner than PostFinance for our entry into the Swiss market. As part of the continued expansion of an international credit marketplace, this joint venture represents a significant step in our business development,’ says Dr Dominik Steinkühler, co-founder and managing director of Lendico.
Hansruedi Köng, CEO of PostFinance, is delighted to be able to join forces with Lendico, a partner which has established itself and enjoyed success internationally in a rapidly expanding industry. ‘Our vision for this cooperation is to take crowdlending in Switzerland from niche status to the mass market. The combination of Lendico’s innovative capacity and our structures in Switzerland offers the best conditions for Lendico Schweiz AG to become a market leader in the future.’
