Neyber – an online lending solution for employee loans – has officially launched.
Neyber allows employers to offer affordable loans to their employees. The platform's loans are repaid using an innovative salary deduction mechanism, which is integrated seamlessly into an employer’s payroll systems. The platform believes that the resulting lack of friction in the repayment process will translate to significantly lower defaults. Neyber announced its official launch today, in tandem with the announcement of a successful £6m Series A funding round, which follows on from a £2.5m seed-stage round in 2015.
Neyber has been bubbling away behind the scenes for some time. The platform has already lent £8m to the police force via a year-long partnership with Police Mutual. Police Mutual has been assisting officers, staff and their families with their finances for over 140 years, and today boasts around 200,000 members. The work that Neyber has done with Police Mutual over the past 12 months has saved borrowers an average of 20% on monthly debt repayments – the equivalent of a 5% yearly pay rise, according to the platform’s findings. Borrowing rates through the Neyber platform are advertised at 4.9% APR. The platform’s loans range from £500 to £25,000 in size.
The “leanness” of the platform – not uncommon amongst alternative lenders – limits costs, a saving which is then reflected in the price of its loans. But Neyber also enjoys the advantage of an unusually low cost of customer acquisition, as the platform relies upon other companies to advertise its products to employees.
“Neyber's disruptive approach to consumer lending allows us to better manage borrower defaults and originate loans at a vastly lower cost of acquisition and find credit worthy borrowers. Employers gain access to an easy to implement solution that integrates seamlessly with payroll that can also act as a tool for engagement and productivity and reduce stress related absenteeism."
Neyber has lofty ambitions for the coming year, having set its sights on lending over £100m by the close of 2016. Such optimism is not uncommon within the alternative finance space, and we generally take a “wait and see” approach. On the other hand, a cumulative lending volume of £8m (fit for induction into the Liberum AltFi Volume Index UK), and £8.5m of equity-to-date banked combine to form a solid launch pad for success. The Police Mutual partnership is further cause for optimism, as are the findings of a recent Opinium Research survey (commissioned by Neyber), which revealed that, of the 5,053 working UK adults surveyed, 53% would value access to affordable loans through their employers.
The success of Neyber in hitting its goals will likely hinge upon the platform’s ability to generate deal flow – a unique challenge for the workforce-facing platform. The focus will be on signing up more distribution partners of the Police Mutual ilk. Having spoken to Co-Founder Monica Kalia, it would appear that a number of exciting integrations may already be in the pipeline.
Monica and Martin are former employees of Goldman Sachs. The third in the trio of Co-Founders is Ezechi Britton, who now serves as the platform's Chief Technology Officer. Mr. Britton commented:
“At Neyber we understand the challenges faced by HR Directors and have spent time listening to them on how technology can positively impact upon their work and the workplace. It’s why we have invested significantly in creating a unique lending platform that we know will revolutionise the concept of employee benefits in the UK.”
Neyber loans are for now being funded through institutional funding commitments – but that may well change. Monica Kalia tells me that retail money may in time be flowing through the platform. If that’s true, Neyber will enter into a market segment in which third place remains very much up for grabs, with nearly a billion pounds separating Funding Secure – which has lent c. £20m to UK consumer to date – from RateSetter, which is second only to Zopa in terms of cumulative volume, with £990m lent.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.