Welendus

Follow-on

Shaking up the short-term credit market. Welcome the all new peer2peer short-term lender.

EIS

Location: London, United Kingdom

www.welendus.com

Categories: Finance & Payments Digital B2C

Investment sought:: £850,000

Equity offered:: 12.37%

Funded 24 Aug 2018

Investment amount:: £939,104

Valuation (pre-money):: £6,021,435

Idea

Introduction

We believe that short-term borrowers in the UK are underserved and do not get a good and fair service from lenders, whether it’s a payday loan, a short-term loan or an unarranged banking overdraft. Compellingly short term borrowing is at an all time high. This, alongside the bad practice in the sector and widespread customer mistreatment, has led to a huge need for change.

Welendus is re-defining the short-term credit market by introducing a value adding and competitive peer-to-peer short-term lending product. With full FCA authorisation in hand, our aim is to help people in short-term financial needs borrow directly from other people at a cheaper rate with no hidden costs or charges. Being a peer-to-peer lender, Welendus is helping financial inclusion while funnelling the short-term lending returns back to the society.

Our mission is to offer better, ethical, more flexible and more affordable short-term loans for borrowers through a clear, bespoke, and easy to use platform. For lenders, Welendus offers returns with the short-term investment flexibility and the benefit of a provision fund cover.

Intended impact

The short-term credit market is let down by many existing players. Welendus is disrupting this let down market by offering short-term borrowers affordable, ethical and competitive 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:
* Lower cost short-term loan APR starting from 205%, in comparison with up to 1,294% from current payday lenders.
* No hidden costs or charges and no penalty fees.
* Transparent, effective and friendly service.
* No banking fees.
* No early repayment fees.

For investors, Welendus enables them to invest in short-term loans, offering higher returns with the short-term investment flexibility and the benefit of a Provision Fund. We believe this is offering is unmatched in the market.

Using Welendus, investors are able to choose their own return from 5% to 15% p.a. Investors can take advantage of the AutoMatch™ feature which automatically matches corresponding borrowers based on the investors' risk preference. This is in addition to the fully automated Autodiversify™ feature, which can efficiently manage investors’ investment portfolio. Plus, Welendus operates a Provision Fund which aims to reimburse the investor if the borrower defaults.

Substantial accomplishments to date

We have come a long way since we started Welendus with some significant milestones:

* Built a strong and talented team
* Full FCA authorisation
* Platform has proved successful. It is live, trading and revenue generating with over 18k users and over 900 issued loans
* Platform fully developed in-house with top technologies in-place.
* HMRC approved IF-ISA manager (IF-ISA product to be released very soon).
* Members of Level39, Europe's largest FinTech incubator.

In addition to our web and mobile adaptive platform, we are planning to have our iOS and Android apps ready for release in 2018.

Monetisation strategy

Welendus operates on a simple and easy to use structure offering a borrower one single interest rate throughout the duration of their loan. The interest is tailored for each borrower based on their risk, loan value, investor requested return and loan duration.

Use of proceeds

The raised funds will be spent on:

1. Talent: Adding new operational team members.
2. Marketing: online targeted marketing together with referrals and virality.
3. Technology: Continued development to add new functionalities to stay ahead of the game.
4. Services and IP: More IP applications as well as other services.

Market

Target market

Welendus has two target markets:

1. Savers & Lenders seeking higher returns on their investments.
Welendus provides savers and investors unique easy access to the short-term credit market. Using Welendus, lenders are able to earn high risk adjusted return of up to 15% p.a. with short-term investment flexibility and the benefit of a Provision Fund. We believe that this is a unique proposition.

2. Short-term borrowers.
Our refreshed thinking and innovative approach, Welendus brings and all new affordable short-term credit alternative to those in short-term financial needs. Our aim is to revolutionize the consumer short-term credit market from being just a transaction to a relationship.

Characteristics of target market

Since Welendus offers a service to two target markets, this section is divided into two parts:

1. Short-term lending market:
* As of 2012, there was £3.7 billion p.a. in payday loans in the UK.
* £8bn outstanding on overdrafts in high-street banks as of July 2013.
* Market status: The market hasn’t changed for years leaving huge space for disruption.
* Potential: Welendus is looking to revive this market by combining affordable and ethical short-term community based credit. We believe this will help bring confidence back in the market and revive its expansion to meet the increasing consumer demand.

2. Peer-to-peer lending market:
* UK Market Size: Expected to exceed >$13 billion this year (2018) and up to $24 billion by 2020.
* Market status: Booming market with very promising growth rate.
* Potential: Introduce a peer-to-peer short-term lending platform.

Marketing strategy

We have released Welendus beta soft-launch with our mobile adaptive web platform in Q4 2017. This allowed testing and confirmation that the systems, controls and marketing channels were effective and staged to attract exponential growth.

We are looking to end the soft-launch very soon and will increase our marketing budget. We are also planning 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.
* Network effects.
* Virality.
* SEO- organic.
* Price comparison.

Competition strategy

At Welendus we are all about technology & efficiency, creativity and innovation. We are using some technologies in the background which will allow us to verify customers, accurately calculate the risks as well as offer a fully automated fast lending service to borrowers. With technology in our DNA we have built our platform for scalability. With our highly scalable business model we are looking to rapidly reach a market leading position in the UK which will follow with international expansion.

Welendus aims to bring innovative products to the peer-to-peer and the short-term credit 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.

Additionally, we are dedicated to adopting the highest standards and best practicesWith 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 and possibly in a community based environment.
* Offering a clear, simple and easy to use platform.
* Fair customer treatment.

Competing with existing peer-to-peer lenders, Welendus offers new features that will be hard to match by existing players:
* Access to unique short-term credit market.
* Higher potential returns with the benefit of a Provision Fund, no minimum terms and short-term investment flexibility.
* No ties or long-term commitment.
* Innovative technologies using our proprietary AutoDiversify™ and AutoMatch™ features to name a few.

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