Charles Moldow, General Partner at Foundation Capital, has declared that Peer to Peer (P2P) lending – part of the nascent crowdfunding revolution – is destined to hit the $1 Trillion mark by 2025 – a little more than a decade away. Foundation Capital is a venture capital firm where “ventures matter more than the capital”. Every partner at the group has toughed it out as an entrepreneur giving them a valued insight into the struggles of starting and running a startup business.
The P2P finance industry has been on a bit of a recent boom – both within the United States and abroad with industry leaders like Lending Club, Prosper and their brethren in the UK charting a path to swamp the geriatric banking model.
“Traditional lending works well. For the banks.
For centuries, banking has remained fundamentally unchanged. In the simplest terms … banks played a part in the community, and served community needs.
Today, they do neither. Consolidation has created national mega-banks that are more financial mega-stores than they are pillars of the community.”
Moldow notes that in the 2000s US consumers paid an incredible trillion dollars in credit card interest alone – thus highlighting the inefficiency of the current model and the latent demand for a more efficient process to match lenders with borrowers.
Moldow continues to declare;
“But today technology and innovation are making possible a new generation of financial services that are more affordable and more available. That’s why we believe what we’re calling marketplace lending will be a trillion dollar market by the people, for the people.”
We could not agree more.