Orchard, the conduit platform for institutional money flowing into direct lending platforms, has published an update on the marketplace “Lendscape”. Orchard is uniquely positioned to provide perspective into the evolving ecosystem because the majority of substantive marketplace lending platforms are plugged into their network. In this most recent update, Nadia Gonzalez, notes the “ever growing and increasingly complex ecosystem” has exhibited some interesting trends:
When looking at the Originators section, the real estate bucket had the greatest growth, with a 50% increase in new players. The consumer bucket added key lenders that are growing quickly, such as Lufax and China Rapid Finance in China, and Avant here in the United States. The Marketing section also grew, showing that referral services like Lending Tree and Even Financial are in high demand. The Risk Management/Valuation section, which was previously labeled 3rd Party Valuation, has expanded to include players that are providing additional services to the industry. In this grouping, we have added Houlihan Lokey, MarketCore and Small Business Lending Services. Lastly, we have added investors like RiverNorth, who recently filed an N-2 with the Securities and Exchange Commission in order to launch the first Closed End Fund in the U.S., and additional investors like Emerald, Evolution Capital, and Kilgour Williams who are all investing in the space.
Marketplace lending is a fast changing financial network of originators, investors and services that are matching debt to lenders. Early entrants jumped into the space to engender a more efficient borrowing process for consumers and SMEs. Today this process is rapidly evolving to encompass other verticals while big data is being leveraged to fine tune risk adjusted returns. Orchard states that it will update its Lendscape to reflect future changes and we would expect a far different, and more encompassing marketplace lending world, in the coming months.
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