Last week I had the opportunity to travel to San Francisco, where I joined thousands at the premier online lending conference, LendIt USA 2016. This event was packed with panels, demonstrations, networking opportunities, but most importantly, a lot of very smart people.
RealtyMogul.com has been a long-time sponsor of the conference and this year we were excited to be a Silver Sponsor. LendIt’s overarching panel topics allowed our CEO Jilliene Helman, CPO Elizabeth Braman, and myself, to participate as speakers on panels that covered credit, crowdfunding trends, brand development, and international investing.
After the excitement settled, I began to collect my thoughts and knew there would be two questions my team would ask upon my return: What were your biggest takeaways from the conference? And, how do they pertain to what we’re trying to do at RealtyMogul.com?
Over 4,000 attendees graced the floor of the beautiful Marriott Marquis hotel in the heart of San Francisco’s financial district. The event attracted 130+ exhibitors, nearly 500 speakers from 20 countries, and more than 200 thought-provoking sessions in one of the largest expo halls this industry has seen to-date. There were crowdfunding companies, lending marketplaces, investing platforms, service providers, venture capitalists, and a ton of media covering the event.
Let me offer some context: 340 attendees gathered for the inaugural LendIt conference in June 2013. In just 3 years, with the considerable growth of fintech and lending platforms, we are not surprised to see such a spike in attendance. The first-quarter global fintech investment grew 67% year-over-year to $5.3 billion.
More than anything, this year’s event demonstrated how far we’ve come as an industry since Prosper and LendingClub launched about a decade ago and it’s become clear that financial platforms are here to stay.
Growing Is Not Easy (Nor is it expected to be.)
A couple of WSJ and Forbes articles circulated around the conference floor the first day and were a sobering reminder that growing pains are a part of this fast-growing industry and its maturation. The fintech industry has spent the past 10 years trying to work its way into the consumer’s psyche as an alternative to banks and credit card companies. It has, and will continue to, experience regulatory constraints, competitive pressures and the ripple effects to the rest of the financial systems, such as capital markets.
There will be necessary adjustments for the entire fintech ecosystem as we progress, and as we venture into the next phases of fintech evolution, we need to remember it is okay to take a collective breath with each of these adjustments as they come.
Dan specifically talked about the fact that most of the 500 originators in marketplace lending are largely funded by institutional money and only about 10% accept retail money. He also reiterated that the time to scale retail capital is far longer than scaling institutional money. However, institutional money is “fickle”, quick to enter, and quick to leave.
Striking a balance between institutional money and retail capital is something we discuss quite often at RealtyMogul.com. While challenging at times, we understand that it is an integral part of our long term path to success. That’s one of the reasons we believe in full capital stack financing. Not only does it put us in a position be a one-stop-shop for real estate companies looking to raise capital, but it also allows us to provide investment opportunities to both retail and institutional investors. It is always important to remember that investing in real estate is risky, and returns or return of principal are not guaranteed, regardless of whether you are a retail or an institutional investor.
Chinese P2P firms, like CreditEase and China Rapid Finance, had a powerful presence at LendIt this year. There were sessions fully dedicated to China’s strong presence in the marketplace and it included panels such as, “Establishing Investor Trust and Confidence in Chinese P2P” and “Why China is Critical to the Future of Marketplace Lending”. We were even lucky enough to be a part of the discussion when our very own CEO, Jilliene, was invited to speak on the “Capital Flows From China to the US” panel.
One of our core principal beliefs states, “Access through Innovation”, so we hope to make international access universal someday. As a first step towards this goal, RealtyMogul.com will be attending LendIt China in July 2016 for the second time. Our team will be touring and meeting with China’s premier investment firms and internet finance companies. I hope to share those insights with you upon our return!
Perhaps the most anticipated session at LendIt was LendIt PitchIt -- where fintech startups pitched their ideas in front of esteemed judges on the main stage. This year, AutoFi, an auto loans platform, won the Judge’s Choice Award and LogicFI, a lending tech platform, won the audience’s award. Both of these companies provide ease and transparency for consumers as they view loans available to them online.
On a personal note, I had the wonderful opportunity to mentor and introduce one of the PitchIt finalists, Akouba, an online underwriting platform for community and regional banks.
Getting to Know Our Investors
On the last day of LendIt USA, RealtyMogul.com hosted their second Mogul Mix Dinner with 30 investors and potential partners at the historic Wayfare Tavern. Our Mogul Mix Dinners give our CEO and other executive team members an opportunity to meet our most active investors personally. The energy and gusto as you entered the dinner was absolutely incredible and the stories shared that evening were impactful. We can’t wait to implement the feedback we received from this group. We currently have 77,000 members at RealtyMogul.com, and we take great pride in being able to implement ways for them to browse investments, do their due diligence, and invest online on one single platform. In order to succeed at this, we have to understand our audience and build an engaging, educating, and simple experience.