Former Loanio Execs Return to Peer Lending, with Institutional Investor Focus
Boca raton, FL, Feb 04, 2013 (PRWeb.com via COMTEX) --
"I am excited to re-enter what has become a high-growth industry that is still in its early stages," said CircleBack Co-Founder Michael Solomon. CircleBack Lending was formed in early 2012 with seed funding from its founding partners. Over the past year, the company has been building a technology platform, setting up necessary legal structures, and forging key vendor relationships with credit agencies, banking partners, and others.
Solomon's prior P2P lending venture, Loanio.com, launched in 2008, but soon suspended operations due to the economic downturn and unexpected Securities and Exchange Commission (SEC) regulations that scared away investors. "We think the environment is much more favorable now for launching this type of business," he says. "Our prior experience putting together the complex components of a peer lending platform gives us a huge advantage this time around," adds Walters, who was the first management team hire at Loanio and is a Co-Founder of CircleBack.
Over the past few years, the peer-to-peer lending industry has been on a high-growth trajectory, with market leader Lending Club recently surpassing $1 billion in total loan originations and adding several prominent board members, including former U.S. Treasury Secretary Lawrence Summers and former Morgan Stanley CEO John Mack. Prosper Marketplace, the other major peer lending website, doubled its loan volume in 2012 and just announced a new $20 million equity financing led by famed Silicon Valley venture firm, Sequoia Capital.
According to Solomon, "This space is red-hot and we see a huge opportunity to complement what the other two players are doing." He is quick to point out, as other observers have, that there is plenty of room for new online lending platforms in the over $2 trillion U.S. consumer credit market.
But unlike Lending Club and Prosper, CircleBack will focus exclusively on partnering with institutional investors and high-net-worth individuals to fund its loans. "This focus should help lower marketing costs, reduce regulatory burdens, and enable us to meet the unique needs of our loan investors," says Walters. "This would not have been possible in 2008 when the business model was unproven and viewed as highly risky, but with over 5 years of strong industry performance, there is rising interest from hedge funds, family offices, and personal wealth managers that will help accelerate our growth."
CircleBack's efforts to attract loan investors to its platform will be bolstered when the SEC issues its final regulations on the Jumpstart Our Business Startups (JOBS) Act later this year. While the JOBS Act has garnered media attention primarily for its rules permitting equity "crowdfunding" over the Internet, it also relaxes restrictions on advertising private securities offerings to accredited investors, who are CircleBack's target audience.
On the borrower side, the company's founding team has over 50 years of collective experience in online lead generation and high-volume Internet operations in the financial services marketing space. Solomon believes this will provide a competitive advantage in acquiring a strong customer base of high-quality borrowers. "Traditional bank lending remains tight while investor appetite for consumer credit assets is growing exponentially," he says. "It is a very exciting time for Internet finance and we look forward to making a positive contribution to the industry."
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About CircleBack Lending, LLC (http://www.circlebacklending.com)
CircleBack Lending is an Internet-based credit platform launching in the 3rd quarter of 2013. Its mission is to provide a secure, transparent, and efficient marketplace for accredited institutional and individual investors to purchase fixed income assets backed by consumer credit products.
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