Data provision and analytics
CEO: Rupert Taylor
Financial services is a data-driven industry though you wouldn’t always know it with your high street Bank (see our post ‘Behind the Curtain’) or your household insurer. The growth of infrastructure of FinTech (“in a gold rush, sell shovels”) makes perfect sense and doubly so in a recognized and trusted provider of data.
Michael on AltFi Data:
"My first brush with AltFi Data was when I noticed marketplace lending CEOs referring to AltFi Data’s website rather than to their own when discussing volumes in the sector with me. Later, I found AltFi Data invaluable in doing my own analysis of the poor profitability of many of the marketplace lenders.
"The cumulative loan volume for the UK marketplace platforms tracked by AltFi Data is £5.6bn, tiny relative to the Banks, but growing at around 100% annually. This is creating an asset class that calls out for securitization and indexation. Meanwhile, marketplace lenders – competing with government-guaranteed deposits – must continue to differentiate itself from the Banks by offering greater transparency. Aggregator sites offering access to underlying lending platforms as well as wealth managers looking for higher returns in the era of QE all need reliable data on marketplace loans and the platforms. All of this suggests a profitable future for AltFi Data – even before one considers growth opportunities in other Markets such as Continental Europe, Australasia, North America."
Michael is a non-executive board member of AltFi Data.
Buy to Let Mortgages
CEO: John Goodall
Michael on Landbay:
"Landbay is impressive in its service levels to mortgage brokers (the market remains largely intermediated); this partly derives from its integrated sales and underwriting model. Maintaining these service levels as the firm grows will be a challenge but is already recognized as such.
"As with UKBN, management is not in a hurry to exit. The scale and diversity of Landbay’s funding are likely to continue to improve. I believe the firm can grow into what is a huge market for years to come and that, in time, management can successfully exploit related revenue streams.
"The UK Buy to Let market is already huge with >£30bn in new buy to let mortgages expected in 2015. Whilst there will probably be increased regulation and cyclical ups and downs, I believe that this market will grow long-term for structural reasons. In London, the South-East and some other parts of the country the political mantra that any person - or couple - with decent jobs should be able to buy their own home is becoming an empty piety (though politicians will neither admit this, nor increase supply through large scale green belt construction). In this rigged market there are likely to be an ever-increasing number of financially sound long-term renters. The under-siege welfare state and uncertainty over state provision of pensions also suggest that long-term savings through property investment is likely to grow. Defaults in the sector have been very low, even in hugely stressed conditions."
Since October 2015, Michael has been a member of Landbay's Advisory Board.
CEO: Chris Maule
SME financing is a contentious issue in a number of European countries. Whilst the Banks feel they meet all, or most, sound borrowing demand this is not echoed by managers of SMEs. Access to credit is not the only issue; the time taken for Banks to deliver credit approval is an issue in itself. A number of the most interesting Fintech models are aimed at the SME sector.
Michael on UKBN:
"I like UKBN’s diligent approach to under-writing standards and see significant upside in coming years not just in the number of deals but in average volumes. Management has an excellent understanding of the space and is not in a hurry to exit. (I feel this is an increasing factor with some FinTech firms with a consequent risk of sub-optimal short-term decision-making; how like the Banks - already!). The relationship UKBN has with the GLI Finance Group is likely to provide significant amounts of funding to the platform. In the long-term, there also exist interesting related revenue streams."
Michael is a non-executive director at UKBN.
Associated media coverage:
CEO: Goncalo de Vasconcelos
Michael on Syndicate Room:
"SyndicateRoom’s business model differs markedly from that of most equity crowdfunding platforms in offering on the platform only firms where there is already a professional investor (angel, VC etc) so that something of a price discovery process has taken place. This reduces the risk of the massive dilution that investors on some other platforms have had to suffer and which risks bringing the entire sector into disrepute."
Working capital finance for SMEs
CEO: Christoph Rieche
iwoca provides working capital to firms at the smaller end of the SME segment. The firms operates in the UK, Germany, Poland and Spain. Average duration is 6-9 months and average loan size is £15,000. The firm can expect to benefit significantly from partnerships with Alibaba of China (being integrated on the platform via API) and Commerzbank (which is marketing iwoca directly to clients in a pilot scheme which we expect to go national). Spain is at an early stage but we expect strong growth in Poland this year. The UK currently accounts for the overwhelming majority of clients and loans originated.
Michael on iwoca:
"First impressions always need to be tested. I'm pleased to say that the powerful and positive first impressions made on me by Christoph Rieche, CEO and the iwoca business model have been borne out by the evolution of the company in the year since we met and by our extensive vetting."
Crossborder bill payments
CEO: Fabian Saide
PayKii is a US B2B tech firm. Its customer value proposition is the enablement of bill payment across borders. Until now, it has been difficult or impossible for millions of expatriates to pay bills back home, whether for themselves or for family, – e.g., utility bills, insurance premiums, medical or educational fees. Clients include the PayPal group in the US and Al Fardan in the UAE.
Michael on PayKi
"The remittance market is huge (estimated at around US$600bn for 2017). PayKii’s offering is relevant to consumers who account for a significant segment of this market. I like the strong progress PayKii continues to make in building a global payment network and a client roster which spans the major remittance hubs. The business has great potential, is being driven by a great team and we are excited to be involved."
Michael has been a Board member of PayKii since March 2017.
CEO: Tim Hardcastle
Instanda is a UK InsurTech firm (SaaS). Its software platform delivers very large improvements in efficiency and agility for product issuance; significant savings for current books of business and excellent UX for the end client (whether consumer or SME). As a direct consequence of the strength of this customer value proposition, Instanda has a client list that includes some of the world’s largest insurers.
Michael on Instanda
"If FinTech firms are generally over-rated, InsurTech is worse. Media coverage and hype are in inverse proportion to actual disruption. Not so Instanda - its software is creating an industry buzz because it offers financial and strategic advantages that any insurance CEO has to consider. I am delighted to have been involved as an advisor for some time. The Founder team is impressive and they have created a massively competitive solution with relevance across all insurance products in all markets. The insurance industry is under huge economic pressure to change. Instanda is part of that evolution. I am delighted Assembly is sharing this journey."
Michael has been a Board member of Instanda since June 2016.
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