Emerging from stealth mode, Even Financial is coming public today to reveal their P2P lending marketplace product, as well as announcing that it has secured $2.8 million in seed funding. Aiming to bring value to marketplace lending, Even Financial is focusing on boosting the supply side of the business.
Speaking to Forex Magnates, Ian Rosen, CEO and Co-Founder of Even Financial, explained that there was a lot of demand from investors to extend loans on P2P lending platforms. However, demand is outstripping the supply of borrowers, by a 4 to 1 ratio. To provide a solution, Even Financial is building supply side infrastructure to increase borrowers who tap the P2P marketplace for credit.
Rosen explained that the current model was based on each marketplace acquiring its own clients. However, not every borrower will necessarily satisfy the requirements of the lending platform to become funded. The result is that cost per acquisitions are higher than they should be in the fragmented market.
What Even Financial aims to accomplish is to connect a broader spectrum of borrowers, and match them to the best lending marketplace for their need. Rosen explained that to accomplish this “we are going to use traditional lead generators that exist in the financial industry and provide them a way to introduce clients to lending marketplaces.”
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Even Financial then uses multiple data points to evaluate these leads and refers them to the best marketplaces. For investors, this model provides a streamlined supply of borrowers who match the lending criteria they are selling.
For borrowers, Rosen explained that there were several value propositions Even Financial brought to the table. Firstly, he described that “borrowers aren’t always aware of the different options.” By using a multi-marketplace funnel, it allows borrowers to gain access to multiple lending options. Secondly, Even Financial uses a non-credit score approach for calculating worthiness of creditors. As an example, Rosen depicted that data has shown that owners of certain cars rarely default, but such information doesn’t appear in credit scores.
Overall, Rosen explained that the entire marketplace-based sector was poised to continue to gain demand from investors since it was “a better way of doing business in the consumer credit field.” As an analogy, Rosen compared the potential of the sector to the massive adtech industry. When operated correctly, adtech firms are able to use data to match the most approriate digital advertisers to viewers. The result is that advertisers experience more targeted distribution of their banners and content to match their customer types. Publishers also gain from the higher engagement of advertisers which produces higher revenues. Similarly, Rosen felt that as a marketplace, lenders and borrowers will benefit as data will be used to create more effecienct matches between them.
$2.8 Million in Funding
Along with coming public, Even Financial announced that it has secured $2.8 million in seed funding. The round is led by Canaan Partners which participated in other P2P lending investments, such as Lending Club and Orchard Platform. Also investing are Lerer Hippeau Ventures, Ron Suber of Prosper, Brooklyn Bridge Ventures,Conversion Capital, Social Leverage, 555 Capital and Jon Kelfer of Orchard Platform.
Brendan Dickinson, Principal at Canaan Partners, commented about the investment, “As the demand for P2P finance rapidly grows, we see a huge opportunity to capitalize on the supply-side of the ecosystem. Canaan has seen great success investing in other innovative FinTech marketplaces like Lending Club and Orchard, so we’re thrilled to be backing EVEN Financial as they accelerate the disruption of traditional finance.”