Thanks to Lending Robot, even those who took their finance lessons from Margot Robbie and Anthony Bourdain in “The Big Short” can invest in loans via primary and secondary markets. Users will be able to authorize the platform to trade on their behalf simply by sliding a bar to indicate risk preferences.
Lending Robot integrates with peer-to-peer lending platform Lending Club to let users offer credit and buy and sell notes on a secondary market. Previously, users would have to compete to execute split second transactions for the most popular, highest quality loans. Users also had to fill out an often inaccessible set of profile questions to get the platform to begin trading. While this more detailed framework still exists for advanced users, the interface has been stripped down for casual investors.
Founded in 2012, Lending Robot utilizes machine learning to help customers make more educated peer-to-peer lending investments. The company closed a $3 million Series A in January 2015 and has since grown to over 5,000 clients.
Democratization of financial markets has been on the rise for quite some time. Lending Robot piggybacks on this trend to place algorithmic debt trading in the hands of anyone with a smartphone. It takes just under a second for a loan to go from posted to bought on the platform.
Despite the quick response time, a lot is going on under the hood. Lending Robot parses through everything from FICO scores to employment history and debt-to-equity ratios when determining whether to execute a transaction.
“We are constantly trying to improve our models,” said Emmanuel Marot, CEO of Lending Robot. “Over the next six months the peer lending market still needs to respond to what’s happening to Lending Club . The next six months of growth should be slower but we are seeing insane growth in the peer lending market.”
Assets managed by the platform have tripled over the last year. Excluding secondary markets, Lending Robot customers have enjoyed an average 9 percent return in contrast to the 7.17 percent typically earned through Lending Club alone.
Prior to the interest rate hike by the Federal Reserve, interest rates on Lending Club had been falling. Lending Robot hopes to reinvigorate demand in the peer-to-peer lending space by maximizing returns for investors.
“Ultimately we want to provide a service as easy as a savings account but with returns over 5 percent per year. That’s our goal,” added Marot.
You can follow Lending Robot here as they continue to develop their product and expand to new markets.