From TechinAsiahttps://www.techinasia.com/loansolutions-philippines-seed-funding
By Jum Balea · 1 Jul 2015
Philippine startup LoanSolutions has raised an undisclosed amount of seed funding from a group of international and local investors, led by Singaporean VC KK Fund. Other investors who participated in the round included investment firm Kickstart Ventures and John Dang, co-founder and CEO of online property portal Zipmatch.
Founded by JP Bisson in 2014, LoanSolutions is a website that matches borrowers, mainly individuals and SMEs, with financial institutions. It puts borrowers first by using algorithms and hands-on concierge services in the form of loan advisors to ensure that borrowers can secure a competitive loan.
Koichi Saito, founder and general managing partner of KK Fund, says the expertise of the team was the key reason for their decision to invest in the startup.
“I highly [value] the digital marketing skills of JP Bisson who has led 50 employees at his digital marketing agency for more than three years,” he explains, referring to Bisson’s other firm, Clicklabs.
Dang, for his part, says he saw LoanSolutions as a potential partner for his other company, Zipmatch, in servicing the needs of Filipino home buyers. “Securing a loan is a challenging step in the home buying process and we believe that LoanSolutions is completely aligned with our vision.”
LoanSolutions joins its partner Lenddo in Kickstart Ventures’ investment portfolio. Lenddo is a company that uses algorithms in determining people’s credit trustworthiness based on their social media activities.
Financial disruption
LoanSolutions is among financial tech companies that are disrupting traditional services in the Philippines, and helping drive financial inclusion in the economy.
“Financial inclusion is a key development goal for emerging markets, and as incomes rise, access to financial services should likewise improve, but it hasn’t,” says Kickstart Ventures president Minette Navarrete.
“LoanSolutions helps develop financial markets by orchestrating a reliable, data-driven environment for borrowers and lenders to get matches based on verified identities, and appropriate loan products.”
Bisson tells Tech in Asia his company is a “hybrid” of traditional loan brokers and online loan comparison portals, which means it is in a league of its own.
“We are the only company which combines the online aspect and the personal aspect. Unlike traditional loan agencies, we onboard our leads online. Unlike loan comparison portals, we supply banks with fully filled out applications, including documents,” he claims.
Borrowers come to LoanSolutions’ site and click on the type of loan they are looking for – whether it’s a personal, business, auto, or home loan. They answer a series of qualifying questions to start the process of matching them with the best banks and lending companies. LoanSolutions then validates the reason for why they are borrowing money, and asks them to submit pertinent documents. The startup takes care of the rest of the application process. If borrowers are disapproved, LoanSolutions presents them to another one of its partners.
The startup could be a good alternative for consumers because of its low-barrier requirement of a minimum loan amount of PHP 5,000 (US$110).
For banks, LoanSolutions is not only a way to widen consumer base but also to get insights into market trends based on data gathered from clients.
How does it earn? Bisson says, “we make a percentage of the loan released – from 2 to 6 percent. We also make money selling market data to our financial partners.”
“We’re trying to disrupt the lending industry,” he stresses. “There are a lot of potential lenders in the market and by empowering the borrower with choice and then empowering the lenders with data on the borrower we are able to create real value for all parties involved.”
LoanSolutions COO Maricor Bunal adds, “The current process of applying for a loan is tedious, unfriendly and borrowers never know if they’re getting a good deal. We’re reinventing this by first building a foundation of trust with our applicants and working with them until they get their loan approved by one of our many financial partners.”
LoanSolutions is seeing massive growth in loan applications as it works with some of the largest banks and financing companies in the Philippines. The funding it just raised will allow it to scale fast enough to keep up with the demand.
Bisson says they’ve so far serviced over 2,000 borrowers, with average loan value of PHP 100,000 (US$2,220), and the numbers continue to grow.
Since its launch, the startup has booked over US$100,000 in revenue