LendingRobot, an automated investment platform for peer to peer / marketplace lending investors, has launched secondary trading for Lending Club loans. The Seattle, Washington, based company raised $3 million in a Series A funding round earlier this year to help finance the new service.
LendingRobot allows retail investors, unlike some other platforms that focus on institutional investors, to quickly invest in P2P loans. Users of LendingRobot connect their Prosper / LendingClub accounts and the service uses proprietary algorithms. Users pay 45 basis points per year on transactions (first $5K is free though). The value proposition is as an investor LendingRobot’s service can generate consistently higher returns as opposed to the investor just doing it on their own. Of course automation may also save the individual considerable time. Now LendingRobot is providing ongoing liquidity – no need to hold for full term.
According to a post on LendingRobot, their “mission has always been to simplify the marketplace lending experience for individual investors. Today we have taken a major step forward towards that goal by introducing our Fully Automated Mode”.
The investing service presently targets Prosper and Lending Club loans but it appears the secondary trading is only available for Lending Club for the launch. This may be the first of its kind platform in the US.
LendingRobot co-founder and CEO Emmanuel Marot commented on the new service;
“LendingRobot is designed to simultaneously save time and increase returns for individual investors. Intelligently automating the secondary market is a natural extension of that design,” said Marot. “Without technology like LendingRobot, marketplace lending remains time-consuming, highly competitive and illiquid. This is a shame because, as a low-risk fixed income asset, this will be a game-changer for short term investors looking for safe, high yield returns but also liquidity.”
Speed is important on marketplace lending platforms as most loans fund in minutes today.
What would be interesting is the ability to access assets in some of the marketplace lending platforms that are available only to accredited investors such as Funding Circle. No word on that yet.