Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Online Funding / Investing Portals
How Marketplace Lending is Disrupting Consumer Loans in Canada
Crowdfund Insider | Bret Conkin | Apr 24, 2015
The consumer loan experience is getting an upgrade in Canada courtesy of some new players that are targeting the long waits and paperwork hassles of traditional loans and the high rates of alternative providers like payday loans. Experience in other markets like the US and UK points to a coming wave of disruption to the benefit of customers, platforms and others and at the expense of the big banks.
Marketplace Lending to the Rescue
Two marketplace lending startups are using algorithms and sophisticated data analytics to enable consumers to apply for unsecured “personalized” loan quotes in minutes and to receive funds, as soon as the next day. The funds are sourced from institutions and sophisticated investors without the traditional middlemen.
Often referenced to as P2P lending or Peer to peer lending, that term has become a misnomer as institutions and angels rush into the lucrative space.
GroupLend, based in Vancouver, offers loans of $1,000-$30,000 over a term of 3 years. GroupLend launched 6 months ago and has seen significant market demand; claiming $50M in loan applications to date, double their initial expectations.
Borrowell, out of Toronto, provides loans of $1,000 to $35,000 over terms of 3 or 5 years. Borrowell has already received 500 loan applications in less than one month in operation. Clearly the consumer appetite for a lower cost, convenient, online loan platform appears strong.
For some consumers, it would seem that a revolving Line of Credit (LOC) would offer a much lower interest alternative, but Borrowell CEO Andrew Graham points out the benefit of “knowing the debt will be gone in 3 or 5 years” versus the interest only payments and ongoing costs of a LOC.
GroupLend looks at thousands of data points including recent banking transactions to better understand applicant’s ability to pay. This informs approvals and personalizes the rates with an APR between 6.3%-17.5% for GroupLend.
Borrowell rates range from 5.9%-18%.
Checkout:
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NCFA Hosts Crowdlending Panel Discussion with InvestNextDoor and GroupLend
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Borrowell set to become second member of Canadian marketplace lender’s club
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Grouplend, Canada’s First Online Lending Marketplace, Expands Its Offering Across the Country
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Event Toronto, June 2, 2015: Money Forum 2015
Over time, GroupLend CEO Kevin Sandhu noted “the algorithms get smarter, so that we have been able to reduce the rates charged already.” While the data sets are small to date, the complexity and massive size of the consumer loan industry indicates the impact Big Data could have on informing new product models going forward.
The platforms then “sell off” the loans to the investors who earn an interest premium for the risk taken. A growing lineup of institutional and angel investors have seen the massive success of this new product category in markets like the UK and US, both in terms of returns and the low default rates.
In the case of Borrowell, those investors include Equitable Bank and OakWest and high profile angels like John Bitove. A Family Office and other Angels also back GroupLend. The promise of better investment returns is getting marketplace lending noticed. Smart money, for sure.
Who is using these platforms?
Sandhu states that they have done business in all provinces and territories ex Saskatchewan, Quebec and Nova Scotia and Graham indicates initial interest has come from BC, Ontario and Alberta.
The average loan size at GroupLend is around $15,000. The typical loan APR is in the 12-13% range, far cheaper than credit cards or payday loans but more than other financing options. Sandhu points out that while credit consolidation has been the biggest category of applicants (~65%), the balance of apps are for other needs including weddings, home renovations and used cars.
The opportunities and challenges of Fintech or Altfi Startups
The two players are friendly with both seeing the benefit of legitimizing the sector and that there is enough market share to go around. Another entrant Lendful, also based in Vancouver, is currently preparing for a 2015 launch.
Graham saw as a key challenge that “we were determined to go to market with credible investors” to build trust amongst their customer base. He added, “Get started with a great team as handling funds is high stakes. Push innovation while carefully adhering to regulations.”
Sandhu’s key challenge has been “making the right person aware of the product” as they are not a lender of last resort and that has been where some of the initial interest has been sourced. He emphasized the considerable investment that has been made in technology and that the Canadian market still lacks credit data furthering the challenge of getting the risk profiles right.
While the challenges are significant, the opportunities in Alternative Finance (Altfi) and Financial Technology (Fintech) appear massive. The huge gaps between investment returns and debt costs are a recipe for disintermediation.
Graham emphasized that the opportunity for other startups considering the space is considerable and that the Finance sector is about 5 years behind the Retail sector in the adoption of new models. Sandhu’s advice is to beware applying other market models to Canada as the market and culture is unique and needs to be customized. Still, he sees that the consumer lending space is on a precipice and startups like his are poised to “shake the banks up.”
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Crowdfunding Platform RocketHub Acquired for $15 Million
Entrepreneur | Catherine Clifford | April 17, 2015
In yet another sign that the crowdfunding industry is maturing, one of the first crowdfunding platforms to launch in the U.S., RocketHub, has been bought by entrepreneurship resource center EFactor in a deal worth $15 million.
New York City-based RocketHub, which operates in over 190 different countries and regions, will continue to exist as its own brand under the EFactor umbrella.
For RocketHub, which launched in January 2010 and has not raised more than $400,000 in capital in its history, the deal is a significant financial win. With the money, RocketHub will grow and add on to its existing suite of products, says co-founder Alon Hillel-Tuch.
“We are by no means going away. It is the entire opposite. We are actually going to be more in everybody’s faces than ever before,” Hillel-Tuch tells Entrepreneur. “It’s not that RocketHub is disappearing. It’s being acquired and then basically [being] fed steroids.”
The philosophy of joining with EFactor, an online resource center for services for entrepreneurs, is that entrepreneurs will be able to raise money and also get access to mentorship in the same place, says Hillel-Tuch.
View:
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Brian Meece, CEO/Co-founder, Rockethub Closing Keynote at 2015 Canadian Crowdfunding Summit (Mar 2015)
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Canadian Crowdfunding Directory
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Investments in crowdfunding platforms have already doubled this year
Raising money on a crowdfunding platform indeed opens the door of possibility for so many startups. But startup money alone won’t build a successful company. “The typical funding platform will help you get money and send you on your way. And that will not be the case for us, and that’s what excites me,” says Hillel-Tuch.
EFactor is technically incorporated in Nevada is based in New York and has 1.5 million members in 196 countries. The platform helps entrepreneurs helps its community of entrepreneurs get their questions answered, whether that’s about marketing, social networking or mentoring.
For EFactor, the deal means expanding the services it can offer its members. "Our acquisition of RocketHub is the launching point of our ability to service entrepreneurs with needed content, education and financing options such as crowdfunding all of which are offered by RocketHub," says Adriaan Reinders, EFactor’s CEO, in a statement announcing the deal.
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
InvestX Brings Crowdfunding to Private Equity Deals
The Wall Street Journal by Amy Or | February 13, 2015
The rush to tap individual investors’ money for venture and private equity deals has taken on a new twist.
InvestX Capital Ltd., founded last year with offices in Dallas and Vancouver, has established a crowdfunding platform for so-called accredited investors to back venture and growth equity deals, similar to what Kickstarter does for individual projects.
The operating model—made possible by the April 2012 passage of the Jumpstart Our Business Startups, or JOBS Act, which relaxed rules governing how companies can raise capital—is a 180 degree shift from the traditional fundraising practice that private equity firms employ, where a select group of investors commit to a blind pool of capital for investing.
Related: Private Equity Crowdfunding Marketplace for Retail Investors InvestX Announces Beta Launch
InvestX partners up with financial sponsors who slice out a part of their deals for small investors, according to founder and Chief Executive Marcus New.
Many of the biggest names in private equity have been pursuing retail investors’ money in a bid to diversify their investor bases.
Blackstone Group said late last month that it had launched a first-generation retail vehicle, Blackstone Total Alternative Solutions Fund. That follows a move by Carlyle Group, which established a platform to bring individual, accredited investors into its buyout funds.
The minimum investment to get into Carlyle’s platform is $50,000. Blackstone’s is $250,000.
InvestX, on the other hand, allows accredited investors to participate with a minimum of just $2,500. For an individual to qualify as an accredited investor, they must have annual income of more than $200,000 or a net worth of more than $1 million, excluding a primary residence.
View: The Future Of Alternative Investments And Crowdfunding
On the InvestX platform, investors take part on a deal-by-deal basis, which means they can choose deals they like and skip those they don’t. That differs from a traditional co-mingled fund structure in which investors commit to every deal a private equity firm makes.
Mr. New said InvestX investors are getting the same deal terms as other co-investors in each deal. In exchange, InvestX investors pay the platform a 2% management fee and a 20% cut of profit, just as they would in a private equity fund.
InvestX is bringing investors two new deals this week: touch screen display technology developer and manufacturer Baanto International Ltd., in which InvestX has a $500,000 allocation out of a $1.5 million add-on to a Series C funding round; and $2 million out of a $150 million fundraise for SineWave Venture Partners, a newly established venture fund that seeks to back early stage technology companies.
Related: Why Financial Firms are Joining the Crowd
The deals follow InvestX’s debut transaction: participation in a $6.5 million Series C round of funding for Cleveland HeartLabInc., a clinical reference laboratory involved in cardiovascular risk assessment.
In that deal—slated to close Feb. 14—InvestX teamed up with lead investor Mutual Capital Partners, a Westlake, Ohio-based venture capital firm. The Cleveland Clinicand life sciences venture capital firms HealthCare Venturesand Excel Venture Management also participated in the round.
InvestX has so far raised $600,000 for the Cleveland HeartLabdeal, said Mr. New.
Related: Equity Crowdfunding Frequently Asked Questions (FAQs)
Mr. New expects to bring altogether 20 to 30 deals to the InvestX platform this year, ranging from Series A to growth equity, and from deals involving an individual company to fund of funds. He said the wide variety, particularly in the initial phase of the platform, is aimed at taking out the risks of just having deals on, say, the venture end of the investment spectrum, and to find out retail investors’ risk appetite.
The firm is still determining what it will do if fundraising on the platform falls short of the target.
“We expect some deals won’t be funded properly, we understand that. It is a process to learn what investors want in deals,” he said.
Continue to the full article on WSJ.com --> here
Hear Marcus New, CEO of InvestX Speak at the 2015 Canadian Crowdfunding Summit (#CCS2015)
The Future Of Alternative Investments And Crowdfunding
FinAlternatives | Marcus New | Feb 6, 2015
With any fast growing movement there’s a so-called tipping point. Malcolm Gladwell dedicated an entire book to the concept, which went on to become a New York Times bestseller and social phenomenon. The tipping point has been described a number of different ways, but in general, it’s the moment when an idea, trend, business or movement surpasses a threshold and spreads to the masses.
With the documented success of websites like Kickstarter and Indiegogo, and the recent record-setting IPO of LendingClub, it’s safe to say that crowdfunding has surpassed the tipping point. But what comes next for the crowdfunding movement? While the first movers in the space will continue to attract assets, a new phase of crowdfunding sites has emerged that allows investors to receive equity stakes, also known as equity crowdfunding. With the passage of Title II of the JOBS Act, companies and platforms are now able to generally solicit and offer access for the first time to alternative investments such as hedge funds, private equity and real estate.
Private Equity Crowdfunding Marketplace for Retail Investors InvestX Announces Beta Launch
Unlike the first generation of reward-based platforms, equity crowdfunding platforms are gaining traction as a gateway to viable investment opportunities. Whereas anyone could donate money to a man looking to make potato salad through Kickstarter, investors can now invest in companies that create medicine to treat cardiovascular disease brought on by that potato salad!
These new equity crowdfunding platforms are providing a gateway to alternative investments that have historically been difficult to source and almost impossible to access. Until now, investors needed a million dollar check and an existing relationship or personal connection to an investment manager in order to invest directly in anything other than a startup.
But how big is the current market opportunity for equity crowdfunding? Currently, only accredited investors have access to these alternative investments but those assets have been approximated to total $12.7 trillion, as opposed to retail investors, whose assets top nearly $17.3 trillion. With an overall market of $30 trillion in investable assets, it’s clear that these new platforms could absorb just a fraction of those assets and still thrive in the market.
As investors are forced to search for higher yielding and less volatile investments outside of traditional public markets, many will turn to alternatives to generate greater returns, similar to what pension funds, endowments and the ultra-wealthy have been doing for decades. For years, financial advisors have been recommending clients place between 10-15% in alternatives. Now, accredited investors will be able to invest and diversify their portfolios like professional money managers. While no one is claiming that investors will get the exact same results, the opportunity and choice will be available for the first time for all accredited investors to determine their own asset allocation to alternatives.
Many well-established private companies and attractive funds are being launched on these alternatives platforms, which are benefiting both the end investor and the issuers seeking non-traditional sources of funding. Let’s take a look at a few different subsets of the alternative investments being offered.
● Real Estate – While Real Estate Investment Trusts (REITs) have been around for decades, investors have not been able to directly invest with small amounts. One of the leaders in this space is a new platform called Prodigy Network, which allows accredited investors to review offerings on specific properties at minimums as low as $10,000. Prodigy Network has led six international and U.S.-based projects, raising more than $300 million from 6,200 investors around the world and is currently developing projects with a projected value of more than $850 million.
● Hedge Funds – The hedge fund industry has been one of the most secretive and difficult to access. Many financial experts have commented that it’s ripe for an investing “disruption.” With the passage of the JOBS Act, hedge funds can now advertise to investors, but few have taken the opportunity. The recent launch of an equity crowdfunding platform called Sliced Investing offers an online platform for investors featuring lower fees, greater transparency and minimum investments as low as $20,000. The company sets up its own funds of hedge funds and utilizes its technology to charge a fee that is lower than most other funds of hedge funds (between 0.50% and 1% annually). The hedge funds are relatively new funds, considered to be emerging managers with track records between 3 to 4 years.
Continue to the full article here --> here
- See Marcus New, InvestX Founder at the upcoming 2015 Canadian Crowdfunding Summit on March 3 at MaRS Discover!
- Looking for funding? Need help navigating the landscape? Seeking regulatory updates?
- Learn from successful crowdfunders who have raised millions of dollars for their new ventures.
- Looking for new early stage investment opportunities?
- Connect with this dynamic and growing industry today - see you at the Summit (#CCS2015)!
Buy now to receive 10% discount on #CCS2015 Summit Tickets!
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Borrowell set to become second member of Canadian marketplace lender’s club
Financial Post | Barry Critchley | Dec 3, 2014
In early 2015, the second player in marketplace lending – a business that uses online technology to match borrowers seeking fixed rate term loans with institutional capital providers — is expected to be operational.
By then Borrowell will join the incumbent, Vancouver-based Grouplend — which started two months ago — in a business that’s popular in U.S., Europe, Australia and New Zealand.
On Wednesday, Borrowell announced it had received $5.4 million in funding from a group of investors. Equitable Bank and Oakwest Corporation Ltd. (a company associated with the Beutel family) are two of the institutional investors.
The $5.4 million is a mixture of debt (that will be used to fund the loans Borrowell intends to make) and equity (which will be used to fund the operation and provide a return to the investors).
“There has been a global move to changing the way in which loans are made, creating new kinds of consumer products,” said Andrew Graham, Borrowell’s chief executive.
The former executive at PC Financial, said, “technology is starting to create big disruption and big opportunities for new business models,” a development that’s already taken hold in other sectors including retail and travel.
View: NCFA Hosts Crowdlending Panel Discussion with InvestNextDoor and GroupLend
In financial services, consumer lending is the area undergoing the largest change. And Borrowell intends to capture some of that change by offering consumer loans to borrowers with “good credit profiles.” A typical client, Graham said, could be a person who is “employed but carrying [credit card] debt at high cost. We think [some of them] would like an alternative to paying the rates charged by the credit card providers or cards provided by the [retail] stores.”
Kevin Sandhu, Grouplend’s chief executive, said marketplace lending has developed because banks and credit card issuers have “not been innovative for decades. The result: consumers are paying far too much and settling for poor service. We use technology and data-driven systems to deliver faster, more affordable and more convenient solutions.”
Borrowell’s product will be individually priced with the rate being dependent on the borrowers’ credit characteristics. The rate would vary from “6% to the low 20s with the average in the low teens.”
The process will be done online and will take one to two days. The maximum loan is $35,000. Loans will run from three years to five years but can be repaid early without penalty.
To raise the needed capital, Borrowell will sell the loans to institutional investors and to investors who meet the accredited investor rule. (In this way there is no mismatch on term.) And Graham is confident there are enough capital providers, mainly because institutional investors can’t normally get access to consumer loans other than through securitizations.
‘We have spoken to many hedge funds which are interested in coming onto our platform,” he said, adding Borrowell will take a fee for bringing the two parties together and servicing the loan.
For Graham’s group, the pay-off, albeit a long way away, could be going public as San Francisco-based LendingClub is planning. Formed in 2006, the IPO could raise as much as US$800 million. Another option would be to sell a stake to an outside investor – the path followed by Eaglewood Capital, a New York firm set up in 2011.
Continue to the full article --> here
Buy now to receive 10% discount on #CCS2015 Summit Tickets!
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
2014 stats are in: Kickstarter By The Numbers
Kickstarter | January 16, 2015
In 2014, 22,252 projects were successfully funded on Kickstarter. That’s more creative projects than ever before.
- $529 million was pledged to Kickstarter projects last year. That's more than $1,000 a minute.
- Last year, 2,202,171 people backed a project for the first time.
- 773,824 people backed more than one project;
- 71,478 people backed more than 10 projects; and
- 1,125 people backed more than 100 projects.
August had the most Successfully funded projects, by month:
Time of day
Wednesday was the most popular day for pledges.
Early afternoon was one of the most popular times to pledge.
What about Canadians?
Approx 170 thousand backers pledged $27.65 million
Continue to Kickstarter Charts and Graphs --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Learn more About Us | Crowdfunding | Support
Kickstarter dumps Amazon Payments in favor of Stripe
GigaOM |
Crowdfunding powerhouse Kickstarter is taking its $529 million in annual pledges and moving them to a different payment processor. In a blog post Tuesday, Kickstarter revealed it is ditching Amazon Payments and has selected online and mobile payments specialist Stripe to handle its global credit card payments.
The move means that both making a Kickstarter pledge and running a crowdfunding campaign will be easier since Stripe’s tools will be integrated directly into the Kickstarter site. Project creators will no longer have to create an Amazon Payments business account or wait several days to register. Instead they’ll just enter their bank account details into their Kickstarter profiles, and payments will be deposited directly into their accounts once a project is successfully funded.
Project backers, meanwhile, won’t be redirected to Amazon’s portal or required to log into or create an Amazon account. They’ll just enter their payment details on the project pledge page or call up saved credit card information from their Kickstarter accounts.
Amazon processed U.S. projects only, while Kickstarter relied on other payment processors ] to handle its international traffic. Stripe, however, will become Kickstarter’s global processor. The U.S. card transaction fees will stay the same – between 3 and 5 percent – though international Kickstarter users may see their fee structures change when Stripe’s payments engine goes live for all new projects.
Kickstarter said in the blog post that Amazon has discontinued the version of its Payments platform that it used (Amazon has moved to a new payments system and Kickstarter didn’t make the transition) so it began looking for a new partner. It’s a blow for Amazon because Kickstarter was one of its most high-profile payments customers.
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Learn more About Us | Crowdfunding | Support
