The acquired company has interim permission to operate a UK P2P business under the FCA’s regulatory regime – introduced in April of this year. Trustbuddy – continental Europe’s leading short term lender – will kick off lending to UK borrowers by the end of 2014. The platform is already operational in the UK on the investor side. Trustbuddy foresees the UK surpassing Finland to become its largest lending market by mid 2015 (Finland accounted for 37% of revenues in Q1 of 2014). The move makes total sense for a platform which recently raised €30m of institutional money. UK borrowers appear poised to become the primary beneficiaries of the platform’s increased lending capacity.
The UK market is rapidly expanding and boasts a diverse range of operators. The latest Liberum AltFi Index provides a unique insight into the statistical performance of the various sectors and platforms. Trustbuddy is understandably keen to share in the astronomical growth of the UK P2P industry.
The platform is also well placed, as a consumer facing outfit, to enter the space. Although the P2P consumer lending sector remains the market’s largest in terms of cumulative volume – the vast majority of that volume is made up by just two goliath platforms (Zopa and RateSetter). By contrast the business lending arena boasts at least 10 serious operators. Trustbuddy’s short-term, consumer loans proposition should be a well-received shake up to the UK scene.
Acquisitions of this kind are a tried and tested method of entering a far-off market. Funding Circle purchased US lender Endurance en route to a branching out into the States back in October. As much as anything that move allowed Funding Circle to seamlessly fall into line with US regulation. That same strategy has been adopted by Trustbuddy for its foray into the UK.
AltFi will continue to pry into and report on the details of the acquisition.