Meet the startup – interview with Kristjan Koik, CEO of Flender

Flender is a new Irish peer to peer platform that's aiming to be a little different

There's a good chance you have not heard about Flender yet. It launched in Ireland in March of this year. In January it successfully raised £500,000 of equity on the Seedrs crowdfunding website. 

While there are a lot of platforms operating in Europe, we think Flender is interesting for two reasons. Firstly, Flender is looking to help companies raise loans from the business partners, customers, and individuals who know the company well. Once funds are raised from this source, any extra funds required are sourced from 'crowd' investors on the Flender platform. The second reason is that Flender is one of only 2 P2P platforms in Ireland. Ireland has seen a huge reduction of banks operating in the country and is one the European countries most in need of new sources of funding such as P2P. This should create interesting investment opportunities over the coming years, as the demand for credit exceeds what Bank of Ireland and Allied Irish Bank are able to provide.

Special offer for new investors into Flender

Flender are currently running a special offer for new investors. Investors who invest a minimum of €1,000 will receive a bonus of 10%. There are currently loans available on Flender yielding over 10% pa, so this would generate an expected total return of over 20% in the first year. We think that is a pretty attractive return profile. This offer will only be available for a limited time. 

To take advantage of this offer, simply visit Flender via this link and you will automatically qualify when you invest over €1,000. Feel free to contact the Flender team if you have any questions about how their platform works or this offer.

Interview with Kristjan Koik, CEO of Flender

Some people have not heard of Flender. Can you tell us a bit about the history of the platform, and why you set it up?

Flender is a peer to peer finance platform which helps businesses and consumers to borrow and lend money through their existing networks. Businesses can leverage their customer base and strengthen loyalty; while friends become part of each other’s’ success. Flender does this while adding a new element of trust via social network connections.

Who is behind the platform, and what level of investment has there been?

I have a background as a Fintech entrepreneur. Our board members include Mark Roden, founder of Ding.com, and Brian Norton, founder of Future Finance. We raised £500k on Seedrs in January of 2017. We are currently undertaking a £2 million equity raise (outside of Seedrs) that will close in Q4 of this year.

We received our FCA full authorisation in May 2017 and launched with great success in Ireland in March 2017. 

You seem to be focused on SME lending currently. Do you plan to expand into consumer loans?

We provide for both SME and consumer lending however our route to market is through providing finance to businesses.

The Seedrs funding round mentioned a lending app. Is this operational? How much usage is there?

We launched our web app in Ireland in March 2017 and native apps for iOS and Android are on our roadmap with trial of Android app starting in August 2017.

How much has been lent through your platform so far? What volumes do you expect to do over the next 12 months?

We have originated over €120,000 since starting lending in June. We expect to lend €24m over the next 12 months.

How many people are working for Flender currently? What is the background of your credit team?

There are 8 people working full time currently and credit team has combined 60 years of underwriting and chairing of credit committees from biggest financial institutions in Europe.

How much information do you provide about each borrower? Can investors perform their own financial analysis or do they need to rely on Flender?

Our decision engine runs affordability and credit checks on borrowers and we have partnered with worlds largest credit data provider Equifax on this. Additionally we have third layer of underwriting that traditional lenders do not have - borrowers social circle trust. As if moms and dads and people who know borrower the best are lending along with the crowd then this provides for better propensity to repay the loans. Our lenders know that borrowers need to pass affordability and Equifax credit checks and in addition we analyse their bank statements, VAT returns, p&l and cashflow.

Do you take any security over the assets of the borrowers?

For business borrowers we have their personal guarantees as a security to back the loans.
 

You are funding loans through the 'crowd' on the platform and also business contacts of the borrowers. How does this work in practice - does the business seek to raise funds first via their contacts and then top up via the crowd? Can crowd investors see how much has been committed by the 'preferred lenders'?

Borrowers firstly need to gain momentum from their crowd prior to listing on marketplace. Preferred lenders can help close loans quickly and therefore are last ones in the loan.

Do you have any standby servicing / plans in place in case Flender ever stops trading in the future? What are they?

One of the main FCA criteria when authorising firms is their contingency plan. This is a lengthy document that ensures that there are systems and controls in place to protect users in case of emergency. Our users can rest assured that they are protected as we are one of the few firms that have gained FCA full authorisation this year.

Thanks Kristjan for your time, and good luck.

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