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EVEN Financial wants to improve P2P lending marketplaces by better matching borrows and lenders
Lending platforms face a number of challenges, the biggest of which is obtaining borrowers that are right for each of their specific offerings. P2P lenders are currently using a variety of marketing tactics to attract borrowers, but they will often end up throwing out nearly the vast majority of borrower leads during the qualification process simply because they aren’t a good fit.
It's an inefficient system but EVEN Financial, a new lending platform that is currently in stealth mode, is looking finally to solve the problems by more effectively matching lenders with the most suitable borrowers.
The company announced on Thursday that is has just raised a $2.8 million seed funding round. The round was led by Canaan Partners, along with Lerer Hippeau Ventures, Ron Suber of Prosper, Brooklyn Bridge Ventures,Conversion Capital, Social Leverage, 555 Capital, Jon Kelfer of Orchard Platform, and other angel investors.
The P2P lending ecosystem is growing rapidly, with more than 100 marketplace lending originators in the US alone, yet the supply side infrastructure remains fractured and a bottleneck to growth. It is especially difficult for lenders to find the right borrowers, and, conversely, for borrowers to find the right loan originator for their financial needs.
The EVEN Financial platform solves this problem by evaluating borrowers on specific criteria, including credit score and product fit. Borrower leads are sourced, verified, and enhanced with data to create a robust profile that allows lenders to accurately know which borrower will be the best fit for their individual platform, and vice versa.
"While marketplace lending has grown incredibly rapidly, and continues to do so, the ecosystem suffers from a lack of infrastructure on the supply side of marketplace debt," Ian Rosen, CEO & co-founder of EVEN Financial, told me. "The deficit in the supply of loans is the immediate problem EVEN is solving, by improving both the quantity and quality of supply."
EVEN Financial allows online marketplaces for credit, such as Prosper, get more access to more borrowers, who are not only well matched in terms of credit risk, but who are also appropriate to the specific products each platform is selling.
"We believe there is a credit product for everyone, and today the connection between potential borrowers and sources of loan products is difficult and expensive to navigate. As MPL grows, lenders will have more options and possibly better rate options, as a data driven system allows lenders to consider borrowers as more than just their credit score," said Rosen.
"We plan to facilitate this transition by providing a data-rich marketplace and originator services for lenders, while matching potential borrowers more easily with the right product fit. Marketplace lending, and specifically EVEN's, data-driven, market-based approach is a better model for connecting consumers and small businesses with credit and along with the rest of the MPL ecosystem we will continue to disrupt traditional consumer finance."
Using EVEN, he told me, will lower the cost of acquisition for originators since it "can spread acquisition costs across multiple sources of credit and by working with multiple originators fund a higher percentage of loans for the same acquisition cost - thereby lowering costs for all. This philosophy will extend as EVEN expands into originator services."
Founded in 2014, the New York City-based EVEN will be launching publicly within the next two months. Currently it is doing sample integrations with originators, including Prosper, and other partners on the supply side.
The company will use the latest funding to build out its product, as well to enhance its team. EVEN, which is made up of the three co-founders, is in the process of hiring. Several have already committed, so they are effectively a team of 6 at the moment. By the end of this year, the company plans to be at between 10 and 15 with hires in business development, engineering, and product/social marketing.
"EVEN is using a more robust data-driven, market-based approach to solve traditional problems of customer acquisition, and by doing so will help facilitate MPL's growth as an industry, helping lenders see borrowers as more than just a credit score - thereby giving borrowers more options and reducing the growth friction for an already rapidly growing market," Rosen said.
(Image source: evenfinancial.com)
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