Of Caution And Unicorns – Confusion In FinTech World


  • Today’s news-gathering brings tidings of tales that vary from measured prudence to something from across the Pond that looks rather like irrational exuberance.
  • P2P Finance News reports:

The Financial Conduct Authority’s (FCA) new chief executive Nikhil Rathi has said that the regulator will be focusing on the risks involved with higher-return investments, as he set out his strategy.

Speaking on the City watchdog’s Inside FCA podcast, Rathi said the regulators remains “very vigilant” to the risks faced by consumers in a low interest rate environment.

“It’s only natural that consumers are going to be looking for higher returns and also as people have more flexibility over how they deploy their savings, there’s also the opportunity to take more risk as well,” Rathi said.

“That can mean being exposed to scams particularly online and sometimes fraudulent activity and we’re going to be very vigilant around those activities too.”

He didn’t name any products specifically but the FCA has a history of lumping P2P lending into the risky end of financial services.

Rathi also acknowledged that there was a growing risk of regulated firms failing during the pandemic.

“We cannot stop some of the firms that are under FCA oversight from failing,” he said.

“We are not nor should we be a zero-failure regulator.

He added that in those circumstances, the FCA will work to “ensure that risks are managed and consumers are adequately protected.”

Hopin seals £94.3M funding deal, becomes a double unicorn 8 months after launch

Founded in 2019, Hopin is a live online events platform where attendees can learn, interact, and connect with people from anywhere in the world.

The virtual event provider recently raised $125 million (approx £94.3 million) in Series B funding led by existing investor IVP and new investor Tiger Global and joined by Coatue and DFJ Growth, along with Hopin’s returning investors Accel, Northzone, Salesforce Ventures, and Seedcamp.

With the latest round,  the London-based startup has escalated from four employees to a £2B valuation in 8 months after its launch, and has scored the title of one of the fastest-growing startups ever.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.