Peer-to-peer lending 2015-2016
- May 4, 2016
- 2 min read
Peer-to-peer (P2P) lending was one of the hottest industries in 2015. Will 2016 continue this trend?
Here are Peer-to-peer (P2P) lending highlights of 2015:
Peer-to-peer (P2P) lending goes Public
Lending Club went public at a $9 billion valuation; stock traded as high as $15 billion. OnDeck went public at $20 and traded as high as $28, with a market cap around $1.8 billion.
Peer-to-peer (P2P) lending raised billions
SoFi raised $1 billion at a $3.5 billion valuation. Avant raised $325 million at a $2 billion valuation. Prosper raised $165 million at a $1.9 billion valuation. Funding Circle raised $150 million around a $1 billion valuation. Kabbage raised $135 million at a $1 billion valuation
Peer-to-peer (P2P) lending growth is record-breaking
In 2015, Prosper originated $3.7 billion in loans (with $1.15 billion coming in a record-breaking Q4). This growth was double that of the previous year, with revenues of more than $200 million in 2015 — up from $81 million in 2014. Lending Club hasn’t released their 2015 numbers yet, but it’s estimated they will have originated more than $8 billion in loans. SoFi went after the student loan space and has quickly become the largest provider of student loan refinancing.
The Future of P2P lending
There are several factors that will determine the future of peer-to-peer lending:
Rise in interest rates.
Most experts believe that as interest rates increase, so will the number of loan defaults.
Competition from financial institutions and other big players.
While some big banks decided to build their own p2p lending platforms, most of the large banks have decided to partner with the existing P2P lending firms.
Market size.
How big is the P2P lending market?
We believe that in 2016 Peer-to-peer Lending will continue its impressive growth. The rise in interest rates should not slow things down, as long as the economy doesn’t crash. We also may see more IPOs from P2P lending firms and potential acquisitions from large banks, credit card associations (eg. Visa, MasterCard, e.t.c), as well as Internet giants (eg. Google, ,Amazon, e.t.c).
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