Peer to peer lender Albrate is raising growth capital on Crowdcube. The asset backed online lender recently opened up the offer privately raising just shy of £100,000 from 58 individual investors. Albrate has a crowdfunding target of £350,000.
Ablrate is a peer to peer lender that provides access to capital for British SMEs. Investors currently earn a return of between 10% to 15%, according to their website.
The FCA regulated platform says it has originated £44 million of loans since launch in 2014 having returned £10 million+ in interest and capital. Their default rate has been around 0.50% of the total loans completed on the platform. Any defaults are said to be in legal recovery.
Currently, Ablrate has attracted £8 million into their IFISA.
Ablrate has also launched a secondary marketplace for platform investors providing an additional degree of liquidity for the debt-based securities. The secondary market has traded £32 million, generating £1.7 million in fees during the 2017/2018 financial year.
It is interesting to note that Ablrate is working to integrate a new system to connect P2P platforms and loan originators worldwide utilizing blockchain tech. As part of this project, Ablrate will be launching white label partners in Australia, the UK and a new platform in Singapore where they have the opportunity to acquire a company with a local license.
As an investor, you will be purchasing common equity in the platform at a pre-money valuation of £26 million.
Ablrate CEO David Bradley-Ward says that when they started the business they used funds from the founders, followed by a small SEIS raise of £150,000 and then an EIS raise of £150,000 shortly after. The company also raised £400,000 in debt with £250,000 still outstanding.
“So far this has been enough for us to achieve our goals”.
Ablrate says the company has grown rapidly with a turnover increase of over 150%+ per year.
“From the beginning we have aimed to provide fair returns for the risk being taken by our lenders. That should be no different for our shareholders,” says Bradley-Ward. “We have seen many companies of an equivalent size, or smaller than us, raising millions at large valuations before they have even proven they can make sustainable revenues, that would be against our very ethos. When you throw in that our revenue is higher and we are profitable, we decided it was time to open up our shares to the public to join us on the next phase of our journey.”
Early shareholders in Ablrate have seen revenues grow from £100,000 three years ago to £1.7 million now and Bradley-Ward believes that there is much more growth to come. He says they have created much value for their shareholders.
“From the £650,000 of debt and equity we have generated £3.1 million or £4.76 per pound invested from a standing start and £1.7 million of that was last year. Subject to defaults and the loans going to term, we also have £1.4 million of long tail revenue from loan trailing fees paying over the next three year, before we do another penny of business,” explains Bradley-Ward. “That is real value to existing and new shareholders and shows a hockey stick trend, which all tech investors are looking for. We are now ready to scale the business from a profitable stable base.”
Any money raised is expected to be used to launch a new broker platform. The company envisions a service that can be used both by brokers both in-house and external, to manage their deal flow on Ablrate, along with their commissions and fees, borrower clients and deal messaging document coordination, says Alex Benger, Ablrate Director of Business Development.
The goal is to make Ablrate not just a peer to peer lending platform but an “integrated deal financing platform for the alternative finance industry.”
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