Lending

Step into the lending world, where modern finance
and innovation meet.

Credit revolution rests on tech

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.

Why it matters:

Significant market growth potential and investors’ interest unlock numerous opportunities for startups to capitalize on:

  • Exploring specific niche segments (P2P lending and specialized loan products)
  • Adopting advanced RegTech
  • Leveraging blockchain and AI for enhanced services
  • Developing green lending products

Between the lines:

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 have experience with numerous lending startups and understand the keys to creating successful businesses that attract investors

$2B+
Secured in funding
600+
Startups boosted
80+
Industries spanned

Why it matters:

We ace the game of fundraising, navigate through M&A deals, and devise impeccable go-to-market strategies and persuasive pitch decks.

Go deeper:

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.

Driven by rising incomes, growing credit demand,
and a surge in alternative lending
$12K+

By 2027, the global GDP per capita is set to cross the $12K mark.

20% Rise

Private sector debt is expected to jump by 20%, reaching $331T by 2027.

$1.08T Reach

The global P2P market is poised to hit $1.08T in value by 2027.

VENTURE LANDSCAPE

In 2022, the lending
industry venture capital tripled, skyrocketing to
an impressive $11.60B

The verticals funding is flooding to:

  • Fintech lending platforms
  • AI and ML
  • Blockchain in lending
  • RegTech

Leading lending investors

Write to us to know more

Hurdles lending startups overcome

Lending startups must be ready to tackle the challenges the lending industry poses.

Securing funds:

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.

Why it matters

Failure to secure funding may have severe consequences for lending startups:

  • Downsizing teams
  • Pausing operations
  • Facing acquisition
  • Filing for bankruptcy

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.

Building customer base:

Stats: Over 61% of loan clients are likely to become returning customers.

Why it matters

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.

What it takes:

  • Using SEO tools
  • Dealing with paid advertising platforms (Facebook Ads and Google Ads)
  • Using social media (Twitter, LinkedIn, etc.)
  • Cooperating with e-commerce and financial companies

Complying with regulations:

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.

Why it matters

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:

  • Fines and penalties
  • Loss of licenses
  • Reputation damage
  • Legal action

Facing competition:

The lending industry is bustling. The market is saturated with different types of lenders:

  • Banks
  • Credit unions
  • NBFIs
  • P2P lending platforms

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.

Why it matters

Intense competition can cause:

  • Reduced profit margins
  • Difficulty in attracting customers
  • Increased marketing costs
  • Innovation pressure
Start your growth
journey with us

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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