P2P Lending

SoFi

2016.03

The rising P2P lending player: SoFi
P2P Lending
리스트 보기
인사이트
토론질문
영상/기사
국문보기
영문보기

During the 2016 Super Bowl, Social Finance, Inc. (commonly known as SoFi), a marketplace lender that provides peer-to-peer (P2P) student loans, released an advertisement that gained a lot of attention.

  • A 30-second Super Bowl commercial costs $5 million, and thus large companies selling IT/mobile products and consumer goods (including Hyundai) have typically had exclusive access to the purchase and use of commercial airtime during the Super Bowl.
  • SoFi recently secured $1 billion in a Series E Funding led by SoftBank. In preparation for its initial public offering (IPO) and in order to raise its brand awareness, SoFi spend 20% of its 2016 budget on the Super Bowl commercial.

P2P lending is the practice of lending money to individuals or businesses through online services that match lenders directly to borrowers (hence the term, peer-to-peer). P2P companies, notably Lending Club, Prosper, and Sofi, have encroached upon loan markets that have typically been dominated by large financial institutions.

  • Market size: In 2014, the P2P market had amassed $1 billion in loans and the market continues to grow by 40% every quarter.
  • Through Lending Club (1st place), investors can make diversified investments to lenders in $25 increments under the premise of receiving an average of 8% in returns. The company uses technology to operate a credit marketplace at a lower cost than traditional bank loan programs, providing borrowers with personal loans at rates that are 30% lower than the standard financial institutions (Alibaba and Google have partnered with Lending Club to provide affordable loans to subcontractors).
  • Prosper (2nd place) was founded in 2006 as the first P2P company. However, when financial authorities instituted regulations and shut down Lending Club and Prosper in 2008, Prosper failed to respond tactically, causing them to lose their spot as the leading P2P company to Lending Club.

SoFi, unlike the other P2P businesses, started as a company that focused on student loan consolidation and refinancing. This company is a Silicon Valley unicorn that currently monopolizes the market that provides loans to highly educated and high-income young adults in their 20’s and 30’s.

  • Beginnings: In 2011, 40 Stanford alumni invested $50,000 to each of four Stanford MBA students, and these students used the seed money to refinance the school expenses of 100 students.
  • Model: SoFi paid back the principal of graduate students who had loaned at the highest interest rates and offered refinancing at a much lower interest rate.
  • Clients: SoFi marketed its loans to graduate students or early-stage professionals.
  • At of right now, SoFi has amassed $7 billion in loans alone and has successfully maintained the $1 billion investment by SoftBank.

Have you ever felt your traditional financial institution is not rating your credit properly? How did SoFi resolve the issues associated with the loan market? Are any of these plans and ideas applicable to Korea?

Please discuss SoFi with your Ringle Tutor, who is likely also the company’s target clientele.

또는
이메일로 회원가입
이름 *
이메일 *
비밀번호 *
비밀번호 재입력 *
추가 정보 입력(선택)
제휴회사
추천인