Raj Kumar, executive director and Carl Davies (pictured), chief operating officer of FundingSecure, explain what it takes to achieve stable platform growth…
SCALING UP CAN BE A challenge for any business, but when your business model involves hundreds of millions of pounds changing hands via complex algorithms and internal systems, it can be harder still.
But peer-to-peer lending platform FundingSecure is bucking the trend. Stable, incremental growth is at the core of the company’s positively evolving business plan.
Since it began operations in 2014, FundingSecure has lent more than £300m, which has provided challenges along the way. The aim for the next two years is to lend a further £300m whilst continuing to deliver above-average returns for its investors and offering flexible loans to borrowers.
Last year, the platform appointed investment professionals Carl Davies and Raj Kumar as chief operating officer and executive director respectively – part of its plans to accelerate growth over the next two years.
“Early growth happened organically through word of mouth,” says Kumar. “This is a very simple, easy-to-use platform which offers higher rates of return than the industry norm, so that’s been a major attraction to investors.
“Our popularity has grown, we are investing a lot of time and money in developing our internal systems and processes to allow us to scale up with minimal disruption.”
In order to increase the intelligence around each prospective loan, FundingSecure has added a higher level of governance, ensuring in-depth due diligence which includes interrogation of the business strategy plus wider market trends and postcode analysis. The experienced and expanding team will examine how each loan is underwritten whilst new technology systems are being continually implemented to improve the speed and performance of the site and back office procedures.
Artificial intelligence and machine learning have a big role to play in FundingSecure’s platform growth, but both Kumar and Davies have warned that there is a time and a place for this. They have emphasised that the company’s underwriting will always involve human intervention.
“Technology solutions and guidance aside, the decision to actually invest always resides with the investor themselves,” says Davies.
Furthermore, the executives are aware that growth may have to slow down slightly to accommodate the new systems that are coming in.
“A number of businesses have been caught out with the speed of growth and the fact that they have not had the processes and procedures in place to manage the resulting complexity,” says Davies. “We will have these in place to take the business to £600m. Unless you’ve done it before it’s very challenging.”
Luckily, both Kumar and Davies are specialists at this kind of work. They are both highly regarded in the property lending space and have been involved in the scaling up of more than a dozen different businesses.
It is no wonder then, that FundingSecure is getting back on track and meeting its commercial and organisational goals, just a few months after Kumar and Davies were appointed.
By pairing manageable goals with ambitious growth plans and using machine learning alongside real-life experience, FundingSecure’s future looks bright.