The LendingRobot tool may now be applied to Funding Circle US.
LendingRobot is a playing field leveler; offering accredited individual investors a fully automated, one-click method of investing across a range of marketplaces, coupled with detailed analytics. Many marketplace lending services that rely upon a self-selection model advise their investors to spread funds across as many different loan opportunities as possible. LendingRobot removes friction from the diversification process by allowing investors to allocate funds automatically, according to pre-set criteria. But it also goes a step further, by empowering those investors to diversify funds across a number of different marketplaces.
LendingRobot may now be used to invest money through Funding Circle US, as well as Lending Club and Prosper Marketplace. The tie up with Funding Circle US opens up access to SME loans for LendingRobot’s investors. Lending Club and Prosper both engage in a degree of small business lending, but those loans are currently cordoned off for institutional investors.
We suspected the LendingRobot tool was originally conceived in order to address the imbalances that had been created by the practice of institutional “cherry picking”, but CEO Emmanuel Marot tells us that the company was in fact born out of a desire to streamline the investment process. Besides, the major platforms are now increasingly keen to ensure that individual and institutional investors are lending on the same terms, irrespective of the intervention of third party tools.
Marot commented on the new partnership:
“Introducing Funding Circle to the LendingRobot family of platforms demonstrates that our algorithmic investment strategies are extensible beyond consumer credit. The growth of peer lending as an investment vehicle is naturally encouraging an increase in the number and size of focused, vertical marketplaces. What we are building with this partnership is a unified view of all the major aspects of peer lending for investors, making LendingRobot the single solution for robo-advising in well-established marketplaces.”
The LendingRobot service is free for up to $5k in managed assets, and costs 0.45% per year for amounts upward of the $5k mark. The service is open to any individual accredited investor in the US. When we covered the integration of Lending Club and LendingRobot, we wondered aloud whether this signaled a re-emphasising of retail money for the former company. Funding Circle US – spun out of its UK progenitor – has never become quite so institution-dominated as Lending Club, and we suspect that the LendingRobot tie up reflects a desire to maintain that balance.
When we caught up with LendingRobot boss Emmanuel Marot, he described a marketplace lending space that is becoming more and more fragmented, and increasingly nightmarish for individual investors to navigate. Emmanuel believes that the LendingRobot tool has the potential of circumventing the need for a marketplace lending ETF. LendingRobot’s mission is to simplify the investment process, creating a solution that spans consumer, SME and, in time, possibly real estate and student loans too.