In Episode 9 of the Income Insights podcast, co-hosts Denny from Re:think P2P and Kimmo, the founder of Income Marketplace, discuss various topics regarding the platform’s recent progress, upcoming developments, and operational challenges.
Here’s a summary of the key points covered:
Growth and Milestones
Income Marketplace has experienced significant growth over the past six months, with assets under management (AUM) increasing from €8.7 million to €15.8 million. Kimmo is satisfied with this growth but acknowledges that it has taken longer than expected. The company’s goal remains to reach €30 million in AUM, a benchmark that will provide a breather from active growth.
Loan Originators and Onboarding Delays
The platform is working to onboard several new loan originators, with a couple in the final stages of the process. One promising UK originator focuses on litigation funding, a unique addition to the portfolio. Despite some delays caused by structural and legal adjustments, Kimmo is confident these new partnerships will significantly contribute to future growth.
Investor Strategy Shift
Income has shifted its strategy towards attracting higher-ticket investors, moving away from the initial focus on volume. The goal is to balance the number of investors with the size of their investments, aiming for more substantial contributions from fewer investors to optimise operational costs.
Financial Performance and Profitability Outlook
The annual report, submitted in August, highlights positive financial trends. Income’s revenue doubled to €430,000 in 2022, while losses were halved to €590,000. Kimmo estimates the platform could reach profitability by the end of 2025, assuming they continue to grow assets under management and carefully manage investor acquisition costs.
Changes in Buyback Features
The episode also touches on changes to the early buyback feature for loans. Previously, there was a guaranteed buyback on a fixed date, but now it’s optional, allowing loan originators more flexibility. While this change aims to alleviate cash flow pressures for originators, it’s emphasised that they must still carefully manage investor expectations.
Kimmo’s Role
Kimmo has stepped down from some of his formal responsibilities, including his board position, to focus on his health. However, he remains actively involved in the platform’s operations, particularly in loan originator relations and legal matters. He has no plan to exit the company, and he maintains a 12% stake.
Future Fundraising and Equity Strategy
Income Marketplace continues to raise funds from existing investors to ensure operational stability. Kimmo mentions they are in talks with potential anchor investors for future equity raises, possibly including a crowdfunding round to complement institutional investments.
In summary, this episode provided insight into Income Marketplace’s ongoing growth and its scaling challenges, particularly around loan originator onboarding and investor acquisition. The company remains optimistic about reaching profitability shortly while continuing to refine its business model.
