Lendable, the dynamic startup that debuted in 2014, offers competitive, rapid loans that are analysed utilising a soft credit search technique, which ensures that individuals who request a loan quote do not have their credit score impacted. Customers have praised the platform, giving it a perfect score on services and response times, according to review engine Feefo.com. Lendable’s success is owed in part to the fact that it can make loans to those with less-than-perfect credit.
This fintech, which is now supported by Goldman Sachs, has achieved unicorn status, ensuring that early stage angel investors have received a 250-fold return on their capital. As a result, new investors are eager to get in on the action.
According to sources, the valuation was an internal transaction in which the company’s backers increased their ownership and initial investors and staff cashed in an estimated £30 million in shares.
Lendable stealthily attained unicorn status in early 2021. According to Sifted’s investigation, unknown early investors and staff received about £30 million in shares in an internal transaction, while institutional investors boosted their position. Given that Lendable has only secured £4 million in private equity to date, its unicorn status is all the more astounding. Lendable is already ahead of most of its European unicorn competitors, including Klarna, N26, Monzo, and Revolut, thanks to this feat.
The valuation represented a “substantial upgrade” for Lendable, according to Goodbody analyst John Cronin, as compared to the £500 million value linked to the company when Balderton Capital led a secondary sale in 2018.
According to estimates, Lendable now issues a new loan every 30 seconds, using institutional capital to fund its services. It is also rumoured to be developing a new credit card product as part of its aspirations to break into the US market. Due to its rapidly rising sales, fast-track applications, and incredibly competitive rates, this fintech is regarded as an industry leader.
Martin Kissinger, the company’s CEO and founder, founded the Berlin-based peer-to-peer lending firm Lendico for Rocket Internet. Kissinger took advantage of the vast volumes of data accessible in the UK at a pivotal moment in the customer loan industry. As a result, the service is more efficient and speedier than many of the larger peer-to-peer competitors, like Ratesetter and Zopa.
Great customer service
As the classic saying goes, ‘customer is king’, Lendable have made sure that they have treated their customer base like royalty providing them with the best service and results in seconds. You are able to find out your monthly repayments straight away and are completely transparent about the costs that you will incur. They also provide support 7 days a week for their customers.
In a market which has caused a lot of reputational issues before due to the nature of these types of lending business, having a strong reputation with customers is absolutely vital. The lending market often has bad connotations linked to it because of some of the other companies in the sector enticing people to take out loans and slapping them with horrible hidden fees, often forcing them into crippling debt.
Having such a good reputation creates a loyal customer base and also will help drive up the number of users as often the best marketing is through word of mouth, as potential customers are most likely to trust what people they know say about a business.
Riskier customer loans
In March, Lendable signed a £100 million agreement with Waterfall Asset Management, which Kissinger described as a “milestone” for the company. This, according to Weeks, may be interpreted as a strong endorsement of Lendable’s underwriting operation and the idea that they’re making solid loans.
Lendable can also cater to a little riskier market than near-competitors Zopa and Ratesetter because of these types of arrangements. While Zopa’s annual percentage rate (APR), or the rate that 51% of clients will be offered, ranges from 3% to 34.9 percent, Lendable’s rates begin at 5% and average 18 percent.
According to Victoria Van Lennep, co-founder of Lendable:
“They realise the risks that their investment entails since they are qualified investors. Our funding pool includes investors with a slightly larger risk tolerance.”
As a result, Lendable is able to provide loans to customers who previously only had access to payday loans with interest rates in the thousands. One-third of Lendable users utilise the programme to consolidate debt.
Lendable is attempting to accomplish for consumer lending what Transferwise did for currency exchange (You can read more about Transferwise in our other case study focusing on ‘Wise’) : discover a competitive advantage by providing a better customer experience than incumbents: “At Lendable, this means originating small loans faster and less expensively than banks.”
A culmination of these factors above have led to a meteoric rise in the last 18 months where Lendable has seen a growth rate of over 430% and it has big goals of becoming the best in application and transfer loans. And with the way they are currently going, it won’t be too long until they are able to achieve this.
Originally posted at 7startup.vc