11/13/2023 0 Comments Rob stavis bessemerLoan volume at Marlette Funding fell 21 percent from the third quarter of last year to the fourth and seemed likely to decline again in Q1. Those that are not looking to step up investor action are, in some cases, looking to cool down borrower interest. SoFi created a similar fund earlier this year. Meanwhile, Prosper is pushing a passively managed fund for those looking to invest in the Prosper loan basket - instead of individually. To that end, Avant recently hired Raj Vora - formerly an executive director at UBS Group AG - to oversee the firm’s rollout of new in-house funds that will hold Avant loans. Suddenly, it seems the hunt is no longer for investors but for buyers interested in investing in the loans. Investors, now a bit more wary, are looking for higher returns buyers in a bond offering on Prosper loans a month ago were looking for 5 percentage points higher than a similar deal late last year. “It’s a reality check,” said Rob Stavis, a partner at Bessemer Venture Partners, who focuses on FinTech firms. “There has been a fair amount of lemming-like behavior.” “ purchasing these assets somewhat blithely without regard for the potential risks,” said Joshua Rand, chief operating officer of Petra Partners, which launched its first credit fund to invest in the sector in 2013 but recently stopped buying from certain lenders. A short time ago, demand for those loans, which carried reasonable returns in the era of no interest, were extremely desirable, and the main business challenge was underwriting enough to satisfy investor demand. The slowdown, according to WSJ data, is particularly notable among marketplace lenders, who do not carry the loans but instead sell them to investors. They are scaling back their marketing efforts and their pushes to grow their lender bases.Īccording to reports by The Wall Street Journal, major names, like Prosper, Marlette Funding, Avant and loanDepot, are actively and intentionally slowing down their customer acquisition efforts. As the wave of FinTech lenders who stepped into the markets after the financial crisis pushed much of their mainstream banking competition out of the game are coming into a new era with rising interest rates and falling investor demand, their strategic approach to that market is changing.
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