Published on August 15th, 2014 | by admin0
Bad news for YES-secure; Lending Club and WeLab thrive
YES-secure loses bet on high-risk borrowers
British P2P firm YES-secure, launched in 2010, has folded, after pursuing a high-risk borrowers strategy that appears to have failed, with large numbers of defaults and missed payments. Once the 5th largest platform in the market, YES-secure has now emailed all lenders to assure them they will receive a full refund. Figures indicate that it wasn’t only the promised returns (up to 18%) that were high – the company’s bad debt ratio also hovered around 18%, once nearly hitting 25%. Having been a source of funding for borrowers unable to get finance elsewhere, YES-secure has unfortunately now closed, but it has been praised by industry experts for the way it has gone about it, buying out lenders to protect investments.
Lending Club plans IPO
Things on the other side of the Atlantic are looking up though, at least for major player Lending Corp, the USA’s biggest P2P platform, which is looking to raise $500 million through an initial public offering later this year. The company’s figures are booming, with revenue tripled to $98 million in 2013, and profits of over $7 million. Lending Club has issued over $4 billion in loans in the past seven years, making it one of America’s most valuable private companies and probably the one most investors, and financial institutions, are keeping a close eye on.
WeLab Holdings gets additional funding
Meanwhile WeLab Holdings, the first P2P lender in Hong Kong, has raised $14 million from a venture capital fund called Sequoia Capital, based in Silicon Valley, and TOM Group, a media company run by the richest man in Asia. The platform plans to invest this capital into its technology for assessing credit risk and fraud. Mainly targeting young men, WeLab has processed over $51 million in loans since 2013 alone, usually for the purposes of debt consolidation. P2P is a risky business in China, with many platforms shutting down recently, but WeLab look like they have things under control.