LendingRobot and NSRInvest, “les fiancées” of LendingClub

By Efi Pylarinou

It has been bloodbath out there this past week and this Monday looks dismal for Europe and the US with Asia leading an 8+% decline. Publicly traded Fintech companies have not escaped the plunge. Lending Club (LC) and OnDeck (ONDK) are down more than 50% ytd (based on Friday’s close). The highs for both were around $29 and now they are trading close to all time lows, roughly $12 and $9 respectively. Lending Clubs insider-trading activity showed high trading volume, which maybe associated with the end of a lockup period for shareholders. While this shake-out is happening and possibly affecting Prosper’s or Marlette Funding’s time line for an IPO; the online origination space continues to grow and plant its roots deeply. Two significant partnerships have been rolled out:

  • One that makes that makes retail investing in Lending Club and Prosper more efficient; with LC’s “fiancée” being LendingRobot.
  • Another that opens up the online origination market of Lending Club to advisors and brokers, with LC’s “fiancée” being NSRInvest.

LendingRobot focuses on retail investors (as LC has been doing up to now) and is a robo-advisor specializing in the loan marketplace. Founded 3yrs ago, they have developed automation tools and algorithms to facilitate individual investors in selecting, placing and executing orders on loans, discovering new loans as they come to market, and reinvesting cash from distributions. They have provided access to a market otherwise “visible” only to hedge funds and institutions and have offered to retail simple to use analytics and tools for risk management and trading.

Before this partnership with LC, investors using LendingRobot would have to create a LC account on the LC website; then link to the LendingRobot API (confusing for most); and juggle back to their LC account for money transfers when trading or managing cash distributions. Now LC and Prosper have opened up their system and through API integration, LendingRobot users can seamlessly use the tools, analytics, and order system to access Notes from both origination platforms.

In addition, LC announced the launch of Lending Club Open Integration (LCOI) which is the API that allows advisors and broker-dealers to offer Lending Club Notes as an investment option directly to their retail clients. This API integration allows brokers or advisors to offer their clients the LC functionality, which includes reporting of distributions, reinvesting, and reporting of positions and for tax purposes. This means launching a secondary market for LC retail loans, facilitating the creation of customized loan portfolios in increments (as low as $25) and with diversification across many borrowers.

At the same time, LC has partnered with NSRInvest who will use LCOI to allow its’ financial advisor network to manage LC investment accounts. NSRInvest is a marketplace in the P2P origination space that evolved from a traditional P2P picking newsletter into a loan-picking proprietary system. The company targets financial advisors and expects that this partnership will offer its clients seamless access to LC notes (instead of juggling from one site to another). NSR Invest is owned by the same holding company that owns Lend Academy and LendIt Conference.

We are moving towards peer loans becoming a traditional portfolio holding for retail investors. LendingClub is enabling individuals to trade and manage their loan portfolio more efficiently; enabling advisors to dare to offer such securities to their clients looking for high yielding assets; and to broker-dealers that already have experience with the origination space but have been kept away from it for a while.

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