The Liberum AltFi Index: Growth Rates Rebound

By Sam Griffiths on 2nd June 2014

After a slight dip in productivity last month, the growth of the Alternative Finance sector has rebounded – humming along to the tune of a 6.94% growth rate .

The Liberum AltFi Index: Growth Rates Rebound

Here’s a quick summary of our key takeaways from the month of May:

  • Growth rates pick up
  • Zopa and RateSetter evenly matched
  • Strong month for Market Invoice
  • Wellesley continue to impress

Growth rates climbed from April to May in the peer-to-peer consumer lending, peer-to-business lending, invoice finance and equity crowdfunding sectors. This may lend some credence to our belief that an Easter-induced lull slowed activity this time last month, or indeed to the theory that growth suffered through April as a consequence of the peer-to-peer platforms adapting to the FCA’s regulatory regime. The expansion rate for the p2p space in May stood at 7.72% – up from the previous month (6.65%) but nowhere near the dizzying heights of March (9.43%). Bearing in mind the following factors, it’s not unreasonable to suggest that by the end of the 2014 we’ll see the sector’s first double figure monthly growth rate:

The race for dominance in the consumer lending space is very much a two-horse affair currently. Zopa and RateSetter originated almost identical volumes over the course of May – with the latter ahead by a hair’s breadth – £55,519 to be exact. Margin of “victory” aside, it is significant news that RateSetter is now going toe-to-toe with Zopa on a consistent basis. We’ll be fascinated to watch which of the two will pull away and also how the consumer p2p landscape will change, if at all, as recent entrants like LendingWorks gain scale.

Two platforms have enjoyed particularly strong performances in May. Market Invoice traded £19.7 million of invoices, with almost £6 million of that total coming in one day. Evidently the size of transaction going through the platform is on the rise.

Wellesley & Co. once again showcased the demand for its unique mould of platform. After growing by 34.37% through May and topping the £30 million mark, Wellesley appears to be heading the pack of innovative, younger platforms that are already rivaling the incumbent giants in terms of monthly loan volume. 

The sharp eyed amongst our readers may have noticed that, we’ve introduced a slight change in the way in which we calculate the Market Share metric. We feel that calculating the market share for loans originated over the last 3 months as opposed to over the lifetime of a platform provides a fairer reflection of the competitive environment within this rapidly expanding sector – particularly in light of the regular emergence of strong new entrants. The new methodology produces broadly the same picture as our old methodology - a market dominated by the top four platforms (Zopa, RateSetter, Funding Circle and Market Invoice). 73% of alternative financing flowing through these platforms.

You can download the index here.

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Companies in this Article:

Funding Circle
MarketInvoice
RateSetter
Zopa
Circle

People in this Article: