October, once a top online lending platform and leading Fintech based in France, has sold its main asset, “October Connect,” to software firm Sopra. The terms of the asset sale were not immediately available.
According to Les Echos, “it looks like the end” for the Fintech. The sale follows a cessation of lending activity to small and medium-sized firms. October posted a notice outlining its next steps and explaining its decision to effectively exit online lending.
The report indicated that October’s origination platform had been sold to Sopra subsidiary Sopra Banking, which offers a cloud-based, API-driven banking as a service.
Co-founder Patrick de Nonneville told Agefi that the remnants of October will most likely be managing existing loans until they have been completed. There is a possibility the French operations could remain, licensing its own software, which was sold to Sopra, but its operations in other European countries will be closed.
Nonneville pointed to the challenge; the model worked well when interest rates were low, but when interest rates rocketed higher, the model was difficult to operate. It was not just the rate increase but the rapidity of the change that imperiled online lending. This interest rate risk is similar to what caused certain banks in the US and globally to fail.
Some investors on social media referenced rising defaults and lower returns on the platform during the difficult economic environment. Others commented on challenging recoveries for loans in default.
Launched in 2014, at one time, October was the acquirer and not the seller, purchasing competitor Credit.fr in 2022. Voicing its support of sustainable and socially responsible lending, the company reported more than 40,000 investors (lenders) on the platform