2015 UK Volume Predictions

For a bit of festive fun, we’ve used the current growth trajectory of the Liberum AltFi Volume Index and its constituents to arrive at some volume predictions for 2015.

Our predictions in full can be seen in the table below. Highlights include:

• A change in the largest platform by cumulative volume by the end of the year with Funding Circle just taking the crown from Zopa.
• The largest three platforms, Funding Circle, RateSetter and Zopa will all have lent more (or be very, very close to lending more) than £1bn by the end of the year.
• The industry will see 85% year on year (y-o-y) growth with 2015 volumes approaching £3bn.
• The platform that we tip to grow the most on a percentage basis is LendingWorks, with a staggering 567% y-o-y growth prediction (albeit from a low base) on the basis of their recent strong origination.

Of course, determining what will happen in 2015 in such a fast evolving industry is not easy. Platforms are constantly innovating, launching new product lines and tweaking their business models (Assetz Capital’s foray into the invoice finance space and RateSetter’s repositioning as a multi asset class platform are just two very recent examples) in a bid for growth and increased profitability. It is impossible to know what these innovations will be and how they will be received, it is therefore likely that there will be significant variance in these predictions versus actual volume for some platforms. For example, there is very little chance that anyone (apart from perhaps Wellesley themselves) could have predicted Wellesley’s 3,760% growth this year!

We hope that our prediction for the industry volume as a whole, tracked by the Liberum AltFi Volume Index, will prove more accurate.  However, there are still significant limitations - the methodology employed extrapolates historical trends, which cannot always be relied upon to predict future events. There are also several ‘known unknowns’ (such as ISA inclusion, institutional participation and platform M&A) that will become apparent in 2015 and could radically affect origination volumes.

We’ll take a look at the end of 2015 to see how well our predictions hold up. In the meantime, the team at AltFi Data would like to thank everyone for their help and support this year and wish everyone a great Christmas and a successful and prosperous New Year.