BERLIN, February 9, 2017 /PRNewswire/ --
All signs point towards growth: Berlin-based FinTech CrossLend (http://www.crosslend.com) has found a further prominent investor in CME Ventures, the venture capital investment arm of Chicago-based CME Group. CME Ventures is the latest investor to support CrossLend's pioneering approach to securitising individual loans into bonds, which both private and institutional investors can then invest in via the CrossLend platform. Lending banks in particular stand to profit from CrossLend's approach, unique in Europe, as the company also securitises loans originated by third-parties, helping free up banks' balance sheets. Additionally, CrossLend has received a further injection of capital from its long-standing investor, Lakestar.
Tighter equity regulations are increasingly reducing banks' lending capacities, with the result that ever more loan requests are rejected. While banks gain stability through these measures, the European economy is weakened - as middle-market companies in particular are in need of loans. At the same time, institutional investors lack adequate access to fixed-income investments. The EU Commission has already pinpointed the problem with its call for creation of a capital market union. "CrossLend wants to help create such a capital market, by making it possible for investors to join forces with banks to invest in loans," explains Oliver Schimek, founder and co-CEO at CrossLend. "To achieve this goal, we've created a platform that enables investment in securitised individual loans. In doing so, we are making banks P2P-capable, while merging the advantages of the P2P approach with banks' traditional strengths - relationships and data."
According to Rumi Morales, Executive Director of CME Ventures: "CrossLend is our first European investment and the company's innovative setup for securitising individual loans and making them tradable in the future over a public exchange holds a lot of promise. We appreciate the deep industry experience of the management team, their approach of working with regulators, and the potential for CrossLend to facilitate a closer capital markets union in Europe."
CrossLend intermediates loans and securitises them into bonds, in which investors can invest via the CrossLend platform. The advantages of single loan securitisation: pan-European investments are made possible by means of a uniform securities structure, and can also be broadly diversified at a supranational level.
A secondary market to be established in the near future will provide a trading venue for the bonds. In addition to CME Ventures and Lakestar, CrossLend is financed by several other well-known venture capital companies and business angels - including Northzone and Atlantic Labs. CrossLend is currently active in Germany, Spain, the UK and the Netherlands.
SOURCE CrossLend GmbH