Interesting discovery in Nagoya 名古屋で学んだこと

Hello everyone! For those of you in Japan, I hope you have enjoyed Golden Week.


At the end of April I went to Nagoya for a conference on alternative finance (FinTech). Platforms involved in factoring, lending, equity crowdfunding etc. from all over the Asia-Pacific gathered at Nagoya University for the conference.


One prominent researcher from Cambridge University at the conference, Robert Wardrop, presented very interesting views on crowdfunding, which I would like to share here.


The first view was that as regulations in more and more countries allow equity-based crowdfunding platforms to operate freely, rewards-based platforms will suffer. This is because the latter have been used as a means of raising much-needed early-stage capital for lack of a better alternative. Indiegogo and Kickstarter are apparently trying to get involved in equity crowdfunding so that they do not become obsolete.


Mr Wardrop mentioned that startups will most likely gather money on rewards-based platforms, move on to equity-based platforms once they have gathered enough “followers” and funding, and then move on to loan-based platforms as an alternative to equity funding. It is good that startups will have more alternatives with funding going forward, though, as more governments actively embrace alternative finance platforms.


Another interesting view was on the future of loan-based platforms: 1. loan-based platforms will either become like banks so that they can gather depositor money (hence lowering their cost of capital), or 2. banks will try to move into the loan-based crowdfunding sphere. I believe that banks will take more and more notice of loan-based platforms in the future as the latter become too big to ignore.


Finally, me and other representatives of loan-based platforms were asked whether we are “asset managers” (lend money off our books and bear no default risk) or “banks” (lend money on our books and bear default risk). Platforms like Prosper are like asset managers, whereas platforms like maneo really are a mixture of the two. I thought it was a very good observation made by him.


Going to this conference allowed me to meet many amazing people and to see maneo in a more objective way. Looking forward to going to more events in the future!