Secured online lender Borro posts £2.7m loss in 2015, up from £9.8m in the previous year.
Borro, the online lending platform which allows borrowers to raise funds against luxury assets and property, notched a £2.7m loss in 2015. The company’s cost of capital was the deciding factor in keeping Borro from profit. Without factoring in “loan funding costs”, the company made £1.0m in "operating profit" in 2015.
Borro operates a balance sheet lending model, one which is often described as a high-end, online pawnshop. The company’s backers include Augmentum Capital, Canaan Partners, Victory Park Capital, Rocket Internet and Israeli equity crowdfunder OurCrowd.
The company says that it’s on track to deliver a small profit after loan funding costs in 2016, and projects profits growing to £3-4m in 2017.
Borro grew interest and fee revenues by 16 per cent to £10.6m in 2015, and says that it’s on track to grow by a further 30 per cent in 2016. 70 per cent of Borro's revenues in 2015 came from existing clients. 2015 saw business generated through partner channels rise by 50 per cent, while the company also added property lending to its luxury asset lending model.
“2015 was a pivotal year for Borro,” said Paul Aitken (pictured above), founder and CEO of Borro. “Our terrific team has perfected the model allowing us to dramatically improve our financials. Larger loans from valued partners such as auction houses, brokers, and private banks are growing our top and bottom lines.”
“We have demonstrated that our business is fundamentally profitable,” he continued. “This has put us in a position where we are confident that we will secure significantly lower loan funding costs, which will have an immediate and positive impact on the business in 2017.”
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.