A study recently performed by the European peer to peer (P2P) lending platform Robo.cash reveals that the main factors for its success during COVID were the profits it generated in 2019 and “work with affiliated loan originators.”
Robo.cash claims that “remarkably, interest rates, funding volumes and the platforms’ experience do not play big roles here.”
Robo.cash’s research study looked at the 15 most popular or widely-used P2P platforms from 6 different European countries – which includes platforms that have been “performing successfully” during the pandemic and those that have recovered “at least 80% of their pre-crisis volumes.” This is category A of businesses, Robo.cash noted.
Another category of businesses that Robo.cash looked at were those platforms that are trying to bring back their volumes “after the first wave of COVID-19 and have not yet reached 80% of the funding levels prior to the crisis.” This is the second or category B of lending platforms.
Robo.cash wrote in a blog post:
“[Our] research indicates 2 major factors that have apparently determined the platforms’ successful performance. First, all the A-category platforms except one work with their own or fellow loan originators. Second, profitability matters. All the platforms (or financial groups they operate within) from the category A have reported positive profits in the previous year. The B-category platforms, on the other hand, finished the FY 2019 with negative profit – or have not published any reports for this period at all.”
“Surprisingly, interest rates and the period of the platforms’ operation have shown little to no correlation with their success during the crisis. The ‘size’ of the platform does not determine its successful performance either. Large platforms might seem more capable of weathering the storm, but as they often work with third-party loan originators, it is not always the case. In the meantime, smaller platforms are more flexible.”
As reported in early September 2020, Robo.cash had claimed that it was still profitable, despite COVID related Issues. The company said that it was preparing for its initial public offering (IPO) in December 2020 in Australia.
Sergey Sedov, CEO at the Robocash Group, had confirmed during a webinar last month that the IPO will take place toward the end of this year. He also mentioned that Robocash is planning to secure AUD 60 million (appr. $43.7 million) in capital.
Sedov added that most of the funds will be directed towards developing Robocash’s existing line of products and also to expand further by offering new products. The P2P lender will also be entering new markets in 2021, Sedov said.
The funds raised from the planned IPO will also be used to establish a virtual bank in the Philippines.