Welendus raising on seedrs


#1

I was thinking of investing in the last round but I didn’t , made small investment in this round, any thoughts on P2P lending industry.


(Alex Sherwood) #3

Here’s the link to the page for this round -

it looks like they’re doing pretty well


#4

Most of the funds so far has come from VCs.


#5

I think I prefer the p2p lenders with the larger loan books and lower risk/reward. A couple of years ago this was probably Ratesetter, Zopa and Funding Circle. Ratesetter’s signup bonuses work as advertised, and probably got 10-14% annualised, thanks to the signup bonus.

One of the problems with smaller p2p platforms (and I don’t know how big Welendus is) seems to be that if they introduce a bonus/signup offer, new lenders pile in to get the higher interest rate, resulting in an unbalanced market: too much lender cash seeking loans and it either goes unlent or you see the market rates dropping. Had this experience with Growth Street.

Haven’t done any p2p for a couple of years, so others may have more relevant thoughts.


(Jim) #6

I’ve been winding down my Zopa investments over the last 6 months - the default rate is pretty ridiculous now.


#7

Just out of curiosity, what was the default rate you were comfortable investing at versus what it is now?


(Jim) #8

In 2017 my return was 4.3% - roughly expected. This year so far the return is less than 1%. With ever increasing monthly missed payments I expect it to go negative soon ( even with the inbuilt diversification )


(Christopher) #9

Thanks for the share @ss2302! On the face of it, a P2P short term credit proposition is firing off all sorts of klaxons as a retail investor… Not sure I have the appetite as lender in that particular space, but if you can park some of the ethics around payday loans, sorry, short term lending, and they strive (and succeed) to clean up that particular corner of the market, it could make for a very interesting investment. Also, not sure if you saw this, but the FCA is currently carrying out a consultation on how the sector operates, seeking to better inform and protect retail investors, so might change up some of the model if retail investors face higher barriers to fund in the space.

@jim_mcgrain did you opt to lend to D & E category borrowers, or has your risk appetite remained the same? I note that Zopa have a predicted default rate of 7-9% on D borrowers and 10-14% on E borrowers.Their loan book, is open access, it would be interesting to compare late payments and defaults from 2017 to 2018.

Anecdotally, given the loan diversification model, if Zopa haven’t loosened their lending criteria and credit risk analysis, and you didn’t adjust your own risk appetite upwards, it doesn’t paint a particularly happy picture for consumer finances…


(Jim) #10

@CTE The products have varied but the risk profile has been roughly similar throughout - around 85% A --> C1. From my own loan book it’s D’s in particular who seem to be feeling the pinch of late ( E also > expected but not to the same extent )


(Giridhar Tammana) #11

how does Zopa compare to Funding circle on default rate?