Squirrel Money P2P

[Harvey Specter]

Not really comparable as the majority of Squirrels valuation is on the mortgage business.

Agree - $20m valuation for mortgage business, $3m valuation for technology platform of P2P business. Both have different growth profiles and I imagine in a few years, they could be even, if they get their P2P right.

interestingly a NZX listing needs a market cap of >$40m and a decent spread of shareholders. Crowdfunding gives them a good spread and with a $23m pre valuation and a $5m raise, they aren't that far of the needed market cap, especially if they do a small raise as part of the IPO. As such, it has a potential liquidity event in about 12m which is beneficial compared to some of the earlier stage investments (where they could be very successful but you have no way to access your paper profits).

[JB@Squirrel]

@Knot. Drop me an email if you have any issues. Should be ok these days. We are using Jumio for ID and that can be a bit sensitive / clunky. john@squirrel.co.nz

@Kelvin. Interest on call account is built. Just waiting on tidying up a couple of issues and will deploy in our next update (either end of March or end of April).

We'll only be able to pay out whatever interest we earn on the underlying Trust bank account otherwise it constitute another product and we'd need to go through lots of hoops to do that. We're looking at an on-call investment product but that will be a way off still.

[Kelvin]

The Snowball crowdfunding offer document went out on Friday, anyone have any thoughts?

The mortgage business seems solid and they appear to have a really good brand and reputation - probably one of their biggest strengths.

Squirrel Money will require a lot of hard work to build a higher volume of investors and borrowers with P2P being relatively new here and Harmony being the dominant player. The platform seems pretty quiet for now, and I'm waiting to see how it develops before investing more.

Overall seems like they are going in the right direction and I'm tempted to contribute a little bit into the crowdfunding and see how it goes

[Harvey Specter]

Kelvin - was the the private offer to their customers? I haven't seen the wholesale offer come through yet.

One concern I have is there is no cross over in customer base to tap. If you have a mortgage through them, you'd hope they would refinance you rather than send you of to P2P, and if you have a mortgage, you shouldn't be investing. As such there mortgage customers will only become P2P customers in 20-30 years.

Plus I know the loans are lower risk but the returns, after write offs is higher on Harmoney.

[Kelvin]

Yes, the private offer.

Speaking about the crossover in customer base, they actually mention that Squirrel Money can "leverage off our Squirrel Mortgages business"

Not sure how specifically, but I've seen plenty of borrowers on Harmoney who are listed as paying a mortgage, so maybe there is some crossover?? And I'm sure their brand helps.

[Harvey Specter]

but I've seen plenty of borrowers on Harmoney who are listed as paying a mortgage, so maybe there is some crossover?? And I'm sure their brand helps.

If they had a mortgage, they wouldn't be paying Harmoney interest rates if they had a good mortgage broker. They'ed just refinance.

[Lewylewylewy]

I like the idea of investing in people who own their house. I choose to believe that such people are capable of saving (because they've bought a house) but just aren't money smart enough to get a top up mortgage. The fact they're borrowing any money at Harmoney rates immediately tells me that they're not money smart.

Sometimes I wish I could set up a business managing peoples money and just taking a cut of what I could save them - I think I'd be a very rich guy doing this.

[Lewylewylewy]

Is it this month that Squirrel is releasing the system to auto invest repayments back into a percentage of loans? Is that still in the development pipeline?

[JB@Squirrel]

Is it this month that Squirrel is releasing the system to auto invest repayments back into a percentage of loans? Is that still in the development pipeline?

Hi Lewy

No not auto-reinvesting. Not yet.

The upcoming change window (end of March) has reoccurring payment. This is the option to set up a regular payment out of the platform for those wanting to synthesize some level of income.
We've also got some big improvements going into the investor bid process and we're delaying how quickly we jump into fund loans from 24 to 48 hours to give investors more time to jump on live loans.

In April we are ...

Putting interest on the call account (will be roughly OCR - 0.60% so 1.65%)
Launching the secondary market

[Kelvin]

Hi JB, is the upcoming "improved investor bid process" going to show what interest rate I need to bid at in order to get it accepted?

Had a 36 month loan listed today so I put a $500 bid in at 8.5%. But had no luck and now my $500 continues to sit idle in my account. If the platform showed more info such as the indicative interest rate for that loan, I could have reduced my desired interest rate to match that or decided to cancel the bid altogether.