Step into the lending world, where modern finance
and innovation meet.
Despite the current economic downturn, the lending industry is on the rise. AI and blockchain technologies have become the industry’s game changers. These tech advancements are drawing investors, with funding expected to hit $16B by 2027 and the market size set to double. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Curabitur non ex elit.
Significant market growth potential and investors’ interest unlock numerous opportunities for startups to capitalize on:
Opportunities are really abundant, but so are the challenges. The high cost of entry and tight regulations make the lending industry a tough playground for startups to make a splash.
We ace the game of fundraising, navigate through M&A deals, and devise impeccable go-to-market strategies and persuasive pitch decks.
Dive into our lending market research to unlock insights, trends, and the golden keys to drawing funding.
2X growth
The lending industry market size is expected to hit a whopping $15.9T by 2032.
30%
Over 30% of small businesses have used fintech lending services.
By 2027, the global GDP per capita is set to cross the $12K mark.
Private sector debt is expected to jump by 20%, reaching $331T by 2027.
The global P2P market is poised to hit $1.08T in value by 2027.
The industry is swiftly changing due to tech innovations, shifting consumer preferences, and the current economic situation.
And this shift is sparkling new trends:
P2P lending: offering loans to underserved borrowers
AI and ML integration: making lending decisions faster and more accurate
Alternative credit scoring: using more than credit history to judge creditworthiness
Green financing options: supporting eco-friendly projects with green loans
Cryptocurrency initiatives: using digital currencies to back loans
Mobile banking: simplifying consumer access to banking services
Why it matters: being tuned to these trends helps lending startups stay competitive, attract investors, enhance customer loyalty, and manage risks effectively.
VENTURE LANDSCAPE
The verticals funding is flooding to:
Lending startups must be ready to tackle the challenges the lending industry poses.
The lending industry is capital-intensive. And lending startups have limited track records, thus being considered high-risk investments.
Stats: In 2022, the lending sector carved only a 12% piece of the fintech investment pie.
Failure to secure funding may have severe consequences for lending startups:
A case in point: Genesis Global Trading—a company providing trading and lending services—couldn’t raise enough funds, laid off 30% of its staff following significant losses from major crypto events (Three Arrows Capital collapse and FTX crypto exchange decline), and eventually filed for bankruptcy in 2023.
Stats: Over 61% of loan clients are likely to become returning customers.
People are cautious about trusting their money to businesses they’re not familiar with. Thus, startups should win customer trust, with an effective marketing strategy being a golden ticket.
Stats: Over 47% of clients admitted advertisements to be why they considered personal loans. Combining digital marketing and social media may help lending startups reach potential customers.
Combining digital marketing and social media may help lending startups reach potential customers.
It’s no secret that the lending industry is highly regulated. It means startups must comply with numerous rules and regulations, such as the TILA and the FCRA.
The compliance process costs a pretty penny and eats up significant time. Heavy regulation may act as a barrier to market entry, affecting a startup’s agility and overall appeal for lending VCs. Plus, noncompliance with all the necessary regulations may lead to:
The lending industry is bustling. The market is saturated with different types of lenders:
Despite each of these lenders providing a different set of services, they all compete for the same customer base.
Stats: Fintech startups have surged by over 115% since 2019.
Intense competition can cause:
Stepping into the lending landscape? We know the way. From end-to-end fundraising support to outsourced M&A guidance and growth blueprinting, Waveup will help you accelerate your journey to success. Drop us your email, and let's talk!
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