On January 25, Raffael Johnen, the CEO and co-founder of auxmoney, was on stage at the Paris Fintech Forum as the news was still under embargo: Dutch insurer Aegon has agreed to lend €1.5 billion euros over the next 3 years through the auxmoney lending platform. At the same time, the insurer is taking an equity position in the company with a €15 million stake in a Series E financing round.
It is a formidable boost for auxmoney. The German platform was founded in 2007 as a P2P lender and has since then facilitated around €200 million worth of loans to German consumers in 2016 alone, taking the leading position in Continental Europe from the French platform Younitedcredit.
Talking to Laurent Nizri in Paris, Raffael Johnen explained the development plans of the company.
Auxmoney is and will remains focused on lending to the German market. Internal expansion will come later because each European credit market has its own specificities in terms of credit risk. Auxmoney will deepen its penetration and knowledge of the German market by continuously improving its data management and gaining more and more insights from analyzing its proprietary comprehensive data pool of 10 years of credit history.
The company plans however to expand its portfolio of services. One of its main challenges is lowering the cost of customer acquisition in the face of the stranglehold exerted by the likes of Google and Facebook. In these two respects, bank partnerships could help and are in the cards for auxmoney.
“We now have enough capital and experience to partner with banks”, he said.
Raffael Johnen is not worried about finding enough market demand: there are enough underserved creditworthy market segments ‒even in a densely-banked market like Germany ‒ if you know how to identify and appraise them through great data analytics. The company will continue to deliver more loans to more people quicker. Great user experience is key. So are attractive returns for investors.
Through this second round of funding and its equity stake, Dutch Insurer Aegon who had already pledged to fund €150 million worth of auxmoney loans in 2016, is acquiring both a stake in an innovative Fintech and a foothold in a complementary market.
Eric Rutten, CEO of Knab-Aegon Bank will join the board of auxmoney, comments:
“With innovations along the entire value chain of credit and its highly sophisticated and techdriven methods of risk assessments and scoring, auxmoney is another strong case for Aegon to drive innovations in the financial industry for the benefit of society.”
Raffael Johnen, added:
“This investment is a strong signal for the entire FinTech industry in Europe and beyond. Through our efforts to provide capital to millions more people, we have emphatically made the case for a more inclusive financial system. auxmoney is an impactful and sustainable FinTech leader in Europe, and we will continue to make a difference in the banking and finance landscape.”
Raffael’s prognostic for the marketplace lending market in 2017?
“We are going to see more acquisitions related to offering complementary products”
Therese Torris, PhD, is a Senior Contributing Editor to Crowdfund Insider. She is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.