Loan comparison site, Loanstreet, is in the midst of transforming into a fintech company, and for that it is targeting to raise a $3 million to $4 million Series A this year.
To get there, co-founders Jared Lim and Robin Ang are first seeking a round of pre-Series A.
With a new system developed and expansion plans yet to be revealed, Loanstreet is working out its next round of funding, and is currently in talks with several parties for two rounds of financing this year.
“We are looking at two stages, first with a smaller pre-Series A. We are seeing traction so we want to go out there to hit certain targets before going for much larger Series A. Some people are keen on coming in at Series A, some are smaller investors who are looking at the pre-Series A,” Lim, who helms the managing director position, told DEALSTREETASIA.
Loanstreet said it is in talks with venture capital firms for its funding, rather than banks, as the co-founders felt that the banks’ approach were slanted towards the traditional.
“Although we are engaging a private equity firm of one of the local banks, I don’t think we are ready for them yet, in terms of their portfolio and their investment appetite. But the pre-Series A and Series A will prepare us for that,” he said.
Loanstreet is filing a patent for its system, which it intends to roll out in another neighbouring market. Lim declined to reveal details at the moment.
“We are in the final stages of signing. Once this is done, we will be licensing the technology overseas and becoming truly a technology company,” he commented.
Loanstreet helps consumers identify suitable financing products, but at its core, it is a B2B business that banking partners can leverage on to reach more consumers.
With its patent-pending system, it will further transform itself into a financial technology company, surpassing the loan comparison website identity it started out as.
While Loanstreet’s system can be deployed as a white label product into more markets, Lim and Ang are keeping options open to having Loanstreet bring the system over to a new market.
“We are flexible. If someone wants to white label it, we can talk to them; if they want to bring the Loanstreet brand over, we can work it out too,” Ang said.
“Every market will have different maturity, so if they don’t have anyone established yet, we will go in with our brand. If the market already has its established player, it doesn’t make sense for us to build a competing brand there,” Lim said.
For its first overseas expansion deal, Loanstreet will not be extending its brand into the new market, Lim noted.
“We think we are going to see the fruits to all our hard work, this year,” he said.
Loanstreet will be the first in the region to offer free credit health check to consumers online.
Loanstreet was established in 2012, and received its first funding from the now defunct Star Accelerator Fund in September 2013, which was launched by multi-media company, Star Media Group. The amount was not disclosed.
As leadership at the media organisation changed soon after, the fund fell into discontinuation.
App for mortgage applicants
The comparison site recently launched a mobile app for real estate loan eligibility checking in October 2015 and has garnered 1,200 registered real estate agents.
Loan street plans to target 6,000 to 7,000 agents using its app by the end of this year. Malaysia has about 28,000 real estate agents.
“Real estate agents are hungry for more apps to help them in their work. A lot of them show clients the promising properties and proceed with the buying process, only to realise the loan applications get rejected. With our mobile app, clients are able to find out their loan eligibility, so the agents can identify which property (based on price, type, location) to push to their clients based on their budget,” Lim explained.
Via the app, potential home buyers can key in their own data to check how much loan they are eligible for. If they are confident to put the downpayment and apply for a loan, they can choose the mortgage product from a bank of their choice on Loanstreet’s app.
All in, Lim said, Loanstreet aims to complete the loan application process within seven days.
In the three months that the app has gone live, Lim said the number of transactions done for mortgages have started to match the transactions done on the website, which was launched three years ago.
“We see this (app) as the future, the way forward,” he said.
As a B2B business, Loanstreet gets a fee from the banks from every successful loan application done on its platforms.
In 2015, Loanstreet’s revenue saw a four-fold growth, mostly achieved in the last quarter of the year when its mortgage eligibility app was launched.
Lim did not reveal revenue numbers.
However, it also has other revenue streams than just through loan applications. With the data it gathers from its users, it also generates reports and systems that relevant businesses can acquire.
“We also provide reporting and systems behind the scenes to organisations like property developers, real estate agencies. We are actually rolling out with some property developers, to provide these reports for a fee. It’s all riding on the same system,” Lim said.