Interesting move: FinTech Auxmoney invests in loans on its own marketplace

Auxmoney partners with the major French bank BNP Paribas and becomes an investor with 500 million euros on its own credit platform.

The FinTech Auxmoney is one of the largest credit marketplaces in Europe. For 13 years in business, the “Makers” have, according to their own statements, paid out loans totaling 700 million euros in 2019. The loan volume is said to have increased twenty-fold in the last five years. Auxmoney arranges loans to private individuals, the self-employed and to companies via its crowdlenging platform.

Last September, FinTech filled the coffers with an additional 150 million euros in growth capital – the holding company has held it since then Centerbridge as investor in this round, the majority in Auxmoney.

Private and institutional lenders – and now also Auxmoney itself

Auxmoney has recently entered into a partnership with BNP Paribas and is now making 500 million euros available for its own investments in loans on the Auxmoney marketplace. Specifically, this means: FinTech is investing in loans on its own marketplace for the first time using borrowed capital from the major French bank. A newly founded company takes these self-financed marketplace loans on its own books.

The credit platform has grown significantly in recent years. It is quite possible that the corona crisis, as a growth damper, triggered this remarkable step. The need for credit is unbroken and tends to be greater, but the caution and reluctance of investors may also be.

Either way, with half a billion euros, the leeway to meet the demand for credit is expanded. The makers describe their move as a “hybrid model”, which “should underline the attractiveness of the investment form”. Auxmoney will invest in loans on the same terms as all other marketplace investors and wants to create “equal interests”.

Raffael Johnen, CEO and Co-Founder of Auxmoney, comments on the new strategy:

With this step we deliberately draw on a level with the interests of our marketplace investors – this harmony of interests is another important seal of quality on our growth path

Also Daniel Drummer, CFO of Auxmoney, trusts that “normal” investors do not feel competitive, but rather see the FinTech’s own commitment as a confidence-building measure:

This is an important milestone in strengthening our platform for institutional investors – the partnership with a renowned global player such as BNP Paribas will help us to establish new investment structures of significant size on the market

Those responsible at Auxmoney describe the cooperation with BNP Paribas as a “long-term partnership”. The step of acting as an investor on your own loan brokerage platform is unusual, but precisely because of that it is also creative. It remains to be seen whether all the desired effects can be achieved – with the new involvement of the major French bank, the necessary capital seems to be available for a longer period of time to invest in sought-after loans together with external lenders and investors.

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