From left: Flender founders Oli Cavanagh, Jeremy Davies and Kristjan Koik. Image: Tadhg Conway
Our start-up of the week is Flender, a new and innovative take on mobile peer-to-peer finance in the UK and Ireland.
“We’re addressing two markets across two countries with Flender: business lending and consumer lending in the UK and Ireland – an established market currently worth £2.5bn per annum,” explained Oli Cavanagh, co-founder and sales director at Flender.
The Flender platform, which is going live in the UK and Ireland in January, is the creation of technology entrepreneurs Kristjan Koik, Oli Cavanagh and Jeremy Davies.
‘Legally, it’s no different than borrowing from a bank, except you’re going to get better rates, and it’s all done from a handset with digital contracts and no requirement for any paperwork’
– OLI CAVANAGH
The company is currently 95pc towards its target of raising just over £500,000 for 10pc of equity on UK crowdfunding site Seedrs.
The market
As well as the £2.5bn-a-year business lending market, Flender addresses another unique market in both the UK and Ireland: friends and family lending.
“Independent research for Flender earlier this year indicates this untapped market is worth an additional £2.9bn per annum,” said Cavanagh.
“While this informal lending market already exists, Flender is first to formalise it.
“The total addressable market, therefore, is over £5.4bn per annum; more than double that of any Flender competitor.”
The founders
Cavanagh led sales in several start-ups with successful exits including ChangingWorlds, Brite:Bill, Alldatasystems and CI Solutions.
Cavanagh and Koik have also been involved in other successful tech start-ups; most recently DocLink, which helps doctors and their teams collaborate digitally and securely; and Instacoach, a video analysis platform used by tennis, golf, cricket and swimming coaches around the world.
The technology
“Flender is a mobile platform enabling borrowers and lenders to leverage their own social circles and networks,” Cavanagh said.
“The technology quickly formalises loans, with a blended mix of interest rates, underpinned by the reliability of a legal framework and automated repayments.
‘We were approached by two of the high-street banks recently for partnership discussions and it’s clear they are really concerned about nimble start-ups like Flender. It feels good to be part of this scene’
– OLI CAVANAGH
“Legally, it’s no different than borrowing from a bank, except you’re going to get better rates, and it’s all done from a handset with digital contracts and no requirement for any paperwork.”
Cavanagh said that the aim is to capture the alternative friends and family lending market in the UK and Ireland, and to successfully penetrate the existing peer-to-peer business and consumer lending market in both countries.
“We have identified three additional countries in which we hope to launch later in 2017.
“This is likely to make Flender an acquisition target by banks and competitors within a couple of years, at which point we’ll decide either to expand into further territories, including potentially the US, or to exit via a trade sale.”
Cavanagh said that the Flender platform has been built, and integrations are complete, with key partners for credit checking, payment processing and loan management, for example.
“We have business customers lined up for launch in both the UK and Ireland in Q1 2017.
“We are in the middle of a seed capital raise for Flender and are doing this publicly on the equity crowdfunding platform Seedrs. Around half of our investors are from Ireland, joined by private investors from 10 other countries so far.
“When we close this round, Flender will be only the second ever Irish company to successfully raise equity crowdfunding.
Fintech boom
Cavanagh said that regulatory compliance was a big challenge and took nearly 18 months for the UK alone.
“On the plus side, this is a significant barrier to entry to competitors, so we will enjoy a period of first-mover advantage.
“The Flender platform itself was a complex development, since we’re allowing many different lenders to participate in a single loan, and at different interest rates, among other unique features.
Cavanagh believes fintech is really exciting at the moment because there is the ability to disrupt a big old industry quite quickly.
“Both investors and consumers are embracing this. We were approached by two of the high-street banks recently for partnership discussions and it’s clear they are really concerned about nimble start-ups like Flender. It feels good to be part of this scene.”
Cavanagh said that there has never been a better time to build fintech and mobile technologies, and bring them to the market.
“There are more fundraising options for good ideas now than ever before too, especially if you’re open to doing it publicly.
“This can be in return for equity, or by crowd-lending, which is something Flender will be able to help other start-ups with very soon.”
