Our Start-up of the Week is Belfast and Edinburgh-based Orca Money, a young fintech that is out to transform peer-to-peer and alternative lending.
“Orca increases yield, diversifies risk and provides investors with easy access to the alternative lending market by using proprietary research to construct diversified investment portfolios,” explained Orca Money co-founder Jordan Stodart.
Orca Money provides investors with a platform to compare the various peer-to-peer (P2P) companies and products in alternative finance online.
‘Orca will evolve into the hub for alternative lending’
– JORDAN STODART
With offices in Belfast and Edinburgh, the company’s ambition is to drive the mainstream adoption of P2P lending by providing an efficient, intelligent investment solution as well as independent, fact-based market research.
“Retail investors are Orca’s current target market and customer base,” Stodart said.
“Specifically, it targets investors who are older than 45 with investable assets of £150,000. They are generally either retired or working in a professional job,” he explained.
“Family offices and small institutions are our next target as the asset class progresses through the adoption curve – we’re building these relationships as we speak.”
Stodart said that in terms of the broader opportunity, global alternative lending is one of the fastest-growing asset classes in financial services, reaching $360bn of funds lent in 2017. “P2P, a subset of this market – the subset in which we are currently active – accounted for $37bn of this lending. In the UK, £13bn has been lent cumulatively through P2P platforms since 2005 – £4bn in 2017 alone.
“Closer to home, saving accounts are returning close to zero, resulting in people losing money by holding cash in their bank due to inflation. P2P investing offers stable attractive returns, but accessing investments is complicated as the market is fragmented and diverse. Investing occurs directly on individual platforms, which makes building a diversified portfolio extremely painful.
“In short, Orca is a differentiated product in a rapidly growing market and the opportunities for us are vast.”
The co-founders of Orca are Stodart and Iain Niblock.
“We are cousins and have worked together on financial services projects in the past. We’re also Scots who migrated to Northern Ireland to pursue our entrepreneurial dream in 2015,” said Stodart.
CEO Niblock established an alternative lending platform prior to Orca. He also worked in corporate finance as an economist at Centrica plc.
Chief marketing officer Stodart has three years’ experience working in alternative lending as a marketing and sales specialist.
“In early 2017, we built our proprietary analytics engine to automatically analyse major peer-to-peer platforms’ loan books on a monthly basis,” Stodart explained.
“Today, this data-driven, independent analysis has enabled us to construct carefully researched portfolios for investors to select and invest in. Once a portfolio is selected and funds deposited, we onboard the investor on to the underlying P2P platforms held within their portfolio.
“Our customer can log in to their unique Orca dashboard, where they can view the performance of their overall Orca portfolio, as well as a breakdown of the portfolio in terms of performance.
“Our vision is to connect a wide range of global loan originators onto the Orca platform and to construct portfolios using advanced analytics and automated loan selection. Eventually, Orca will evolve into the hub for alternative lending,” Stodart said.
A vision for the future of finance
Orca Money spent its first few years serving investors with fact-based independent research and analysis of the UK P2P market.
“A couple of months ago, however, we launched our latest product – the Orca Investment Platform, a portfolio of P2P investments – and have seen great initial traction.
“This has been helped by having a loyal subscriber base, acquired over the last couple of years.
“Our focus is always on improving customer acquisition, but also on raising a funding round to realise our ambitious goals,” Stodart explained.
He said that, like most start-ups, funding has a challenge. “But we’ve secured it before and will secure it again. There have been times where we’ve had to sacrifice eating to keep the business alive, which isn’t fun.
“Aside from the obvious ones of funding and recruitment, one big challenge is the niche nature of the market in which we play. P2P lending is very niche and, broadly speaking, unknown.
“This causes issues for marketers but, again, our strategy has been pretty successful in promoting the asset class and our own brand. Despite being niche, P2P is a multibillion-pound industry in the UK, with a number of providers and support services, so it’s still a rich hunting ground.”
Stodart said that people who create start-ups are brave. “The scene we’ve been exposed to has been fantastic. It’s almost like a brother-sisterhood. Start-ups are typically understanding and compassionate, willing to share and help, because we’ve all been through it.”
His advice for fellow founders? “Make sure you’re GDPR-compliant. It’s a cliché, but don’t give up. Be fearless. Failure is a good sign, but learn from your mistakes.
“Surround yourself with people who buy into the business vision and, more importantly, the start-up way of life.
“Regarding tech, have doers and thinkers. Sometimes you’ll just need a programmer who can write code for a day, but you’ll also need someone who can think strategically about the future of the technology and product.
“Most importantly, enjoy it.”
Want stories like this and more direct to your inbox? Sign up for Tech Trends, Silicon Republic’s weekly digest of need-to-know tech news.