London: Leading the board at one peer-to-peer venture apparently wasn’t enough for online lending pioneer Giles Andrews.
On Monday, MarketInvoice Ltd., a London-based start-up that’s originated £1.1 billion (Dh5.14 billion; $1.4 billion) of loans, named Andrews as its first chairman. Andrews will continue to serve as non-executive chairman of Zopa Ltd., the British firm he co-founded in 2004. It developed the peer-to-peer lending model that now operates in markets from Europe and Asia to the US.
Andrews said doing double duty wouldn’t pose a conflict because Zopa, the No. 2 British online lender with £2.1 billion in loans arranged, concentrates on loans for consumers. MarketInvoice caters to small companies with loans secured on their accounts receivable.
“MarketInvoice operates in a completely different market,” Andrews, 50, said in an interview. “But it shares the same philosophy as Zopa, which is bringing efficiency and customer service to a banking industry that was broken. I hope to help them through the ups and downs of their business.”
The appointment comes as the UK peer-to-peer industry, the third biggest globally after China and the US, strives to transition from start-up mode into a profitable mainstream business. Britain’s decision to quit the European Union has opened an opportunity as banks retrench. New loans to small and medium-sized enterprises fell to £220 million in the fourth quarter, a 75 per cent drop from the second quarter, according to the Bank of England.
Now both Zopa and MarketInvoice are pushing into markets dominated by traditional lenders. In November, Zopa announced it was applying for a bank license to offer overdraft and other fee-driven products to consumers. Last month, MarketInvoice started offering companies credit lines backed by their orders, a financial practice known as “factoring.”
Anil Stocker, the chief executive officer and co-founder of MarketInvoice, said tapping the factoring sector with about £30 billion in outstanding loans at any given time will double the amount his company arranges this year. Andrews will help guide MarketInvoice through this period, he said.
“He’s the founding father of P2P,” Stocker, 33, said. “He’s going to provide feedback on how to bring new products to market, how to build risk models, and business strategy.”
While Stocker said there was no discussion around a formal alliance between Zopa and MarketInvoice, Andrews’s unusual dual role is bound to spur speculation about an eventual hookup, said Rupert Taylor, the CEO of AltFi Data Ltd., an independent analytics company.
“They do operate in different segments,” Taylor said. “As a result when Zopa gets its banking license, it could have a ready made small business finance platform to bolt on in MarketInvoice.”