The new P2P short-term lender authorised by the FCA and accelerated by Microsoft and Level39
We believe that short-term borrowers in the UK do not get good and fair service from their lenders. This, along with bad practice in the sector and widespread customer mistreatment, has led to a market decline since the peak in 2012. However, more and more people are actually in need of short-term loans.
Welendus aim to re-define the short-term lending market by introducing an all-new peer-to-peer short-term lending platform. With full FCA authorisation, our aim is to help people in short-term financial need borrow directly from other people at a much cheaper rate with no hidden costs or charges. Being a peer-to-peer lender, Welendus aims to help financial inclusion while funnelling the short-term lending returns back to the society.
Welendus will offer ethical, affordable and flexible short-term loans through a clear, simple, easy to use platform to provide short-term borrowers with the good service they deserve.
For investors, Welendus aims to enable them to invest in short-term loans together with short-term investment flexibility.
The short-term lending market is let down by many existing players. Welendus is aiming to disrupt this market by offering short-term borrowers affordable, ethical and flexible short-term loans. Welendus will operate as a peer-to-peer lender, meaning borrowers will be borrowing directly from other individuals.
Summary of features for borrowers:
* We intend to offer a payday loan APR at 172%, in comparison with up to 1,294% from many current payday lenders for the equivalent loan and duration.
* No hidden costs or charges and no penalty fees.
* No fake legal letters and no customer harassment, as is the norm with current payday lenders.
* No banking penalty fees.
* No early repayment fees.
For investors, Welendus aims to enable them to invest in short-term loans, offering higher returns with the short-term investment flexibility and a provisional fund protection. We intend for investors to be able to choose their own return from 5% p.a. and up to 15% p.a. and they will be AutoMatch™ with suitable borrowers to meet their risk appetite. We plan to also offer a provisional fund to protect the investor in the event of borrower's default. This is in addition to the automated AutoDiversify™ feature which all our lenders will automatically benefit from.
Substantial accomplishments to date
After nearly 2 years in development, we have come a long way and accomplished some significant milestones. Here is a short summary to name a few:
* FCA authorised with Full Authorisation.
* Built a strong team.
* Platform fully developed in-house with the highest tech and ready to launch.
* Fully adaptive platform for web and mobile use ready to launch.
* Accelerated by Microsoft.
* Members of Level39, Europe's largest FinTech incubator.
We are now ready for our soft launch in Q4 2017. Exact date to be announced shortly.
In addition to our web and adaptive mobile platform, we are planning to have our iOS and Android apps ready for release in 2018.
Welendus plans to operate on a simple and easy to use structure offering borrowers one single interest rate on their loans. This single interest rate will include our operational fees, risk factor and the investor's return.
Use of proceeds
The raised funds will be spent on:
1. Talent: Adding new operational team members in preparation to launch.
2. Marketing: Targeting marketing online as well as all new outside the box approach.
3. Technology: Continued development to add functionality and the latest tech to stay ahead of the game.
4. Provisional Fund: Initial sum committed for the provisional fund in preparation to launch.
5. Services and IP: More IP applications as well as other services.
Welendus has two target markets:
1. Savers & Lenders seeking higher returns on their investments.
Welendus will provide savers and investors easy access to the short-term lending market. We plan for lenders to be able to earn a higher return of up to 15% p.a. with short-term investment flexibility and provisional fund protection. To our knowledge, this is a recipe not currently existent in the market.
2. Short-term loan borrowers.
Thanks to our all new and innovative approach, Welendus will bring an affordable short-term lending alternative to the people in short-term financial need. Our aim is to change the consumer short-term lending from being just a transaction to a relationship.
Characteristics of target market
Since Welendus will be reaching out to two markets, this section is divided over 2 parts:
1. Short-term lending market:
* Peak Market Size: £2.8 billion p.a. (2012)
* Market status: lower than its peak in 2012 possibly due to the wide spread bad customer treatment practiced by many existing institutional short-term lenders leading to more stringent regulations forcing few lenders out of the market.
* Potential: Welendus is looking to revive this market by combining affordable and ethical loans with the flexibility of the peer-to-peer element. We believe this will help bring confidence back in the market and will help it to return, if not exceed, its 2012 levels.
2. Peer-to-peer lending market:
* UK Market Size: US$7 billion (2016) and up to US$24.1 billion (2020 estimate).
* Market status: Booming market with very promising growth rate.
* Potential: Introduce a peer-to-peer short-term lending platform.
We are aiming to soft-launch with our mobile adaptive web platform in Q4 2017. This will allow us to verify our systems as well as our marketing channels with a moderate marketing budget and to make early adjustments where required.
Following the soft-launch, we will increase our marketing budget and plan to release our native iOS and Android apps. During the full launch we plan to release other very exciting new products that we believe will accelerate our customer acquisition and will lower our customer acquisition cost.
Our routes to market are as follow:
* Targeted marketing through paid Ads (including search engine, social media, and display).
* Promotional Partnerships.
* Innovative above the line customer acquisition product (in 2018).
* Network effects.
* Additional online marketing.
* SEO- organic.
* Price comparison.
At Welendus we are all about technology, creativity, and innovation. We are using some technologies in the background which will allow us to verify customers, calculate the risks as well as offer a fully automated fast lending service to the borrowers. With technology in our DNA we believe we are a highly scalable business model and are looking to rapidly reach a market leading position in the UK which will follow with international expansion.
Welendus aims to bring all new products to the peer-to-peer and the short-term lending markets. We believe that through our all new fully automated platform together with our innovative marketing approach, Welendus will have a head start not only with technology but also with customer acquisition and market share.
In addition, we have focused heavily on compliance and regulations. With the ever-increasing tougher regulations, we believe the long and difficult regulatory processes will create another strong barrier to entry following Welendus launch.
Competing with existing short-term lenders, we consider Welendus to have the following advantages:
* Cheaper and more affordable short-term loans.
* Ethical, friendly and flexible short-term loans.
* Peer-to-peer lending meaning borrowers can borrow from other individuals, funneling part of the return back to society.
* Offering a clear, simple and easy to use platform.
* Fair customer treatment.
Competing with existing peer-to-peer lenders, Welendus aims to offer new features that will be hard to match by existing players:
* Access to the short-term lending market.
* No ties or long term commitment.
* Higher returns with provisional fund protection, no minimum terms and short-term investment flexibility.
* New agile fast payment technologies; AutoDiversity™ and AutoMatch™ to name a few.