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Harmoney's loss is really a gain




By David Tuckwell on 2nd August 2017

Neil Roberts, Harmoney

New Zealand's biggest P2P lender is losing less money as its fundamentals get better and better. 

 

New Zealand peer-to-peer lender Harmoney’s revenue climbed 63 percent this year, edging the company closer to profitability.  While still loss-making, Harmoney has halved its losses from $NZ14 million last year to $7 million this year.

 

As well as climbing revenue, its financials were helped by a 15 percent drop in marketing costs, suggesting the company has grown out its brand recognition to a point where it feels comfortable paying less for advertising.  

 

Revenue growth was boosted by income received through fees. Fees to wholesale lenders, service fees, and lender fees all more than doubled year-on-year.

 

“Economies of scale in a low-margin business and improvement in our unit economics have enabled us to drive strong revenue growth in readiness for our third full year of operation,” said Simon Ward, Harmoney’s CFO, in a press release.

 

“While a net loss has been registered, this has more than halved on last year, a significant outcome for a fintech company still in start-up phase in a new industry.”

 

To date, Harmoney has lent more money than any other Kiwi P2P platform.

 

As the first P2P lender in New Zealand, it benefitted from first mover advantage for some time. But other platforms, such as LendMe and Squirrel Money, have entered the Kiwi market and introduced more competition into P2P lending the past two years.

 

Like other fintech startups, Harmoney has attempted to scale before heading towards profitability, running at a loss the first few years while building out a client base. Squirrel Money also posted a loss for the financial year.

 

The company said it broke even the three months ending June. Neil Roberts, Harmoney’s CEO and largest shareholder, said he hoped to be in the black this financial year.  

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