Personal Loans Landscape, Pt. 2

Part
01
of four
Part
01

Personal Loans: Smart Asset and Finder

As highlighted within the enclosed spreadsheet, SmartAsset and Finder are both web-based financial product marketplaces whose product portfolios extend far beyond personal loan services.

SmartAsset

Planned Expansion / Strategic Initiatives

  • According to SmartAsset co-founder and CEO Michael Carvin, the company is primarily focused on expanding its SmartAdvisor platform, which connects financial advisers and potential investors.
  • Notably, this expansion will take place within the company's existing web-based platform, through the enhancement of existing tools, the acquisition of new customers and the engagement of additional vendors.
  • In support of this effort, SmartAsset is "hiring aggressively" within its sales team, with the specific goal of "recruiting more financial advisers" to use the SmartAdvisor platform.
  • Meanwhile, although several strategies were attempted to identify SmartAsset's current strategic initiatives, including reviewing executive interviews and analyzing SmartAdvisor's funding announcements, no insights were available apart from the company's product expansion plans through its SmartAdvisor platform.

Compensation Model for Personal Loan Services

  • According to Mr. Carvin, the company makes the large majority of its money from businesses other than its personal loan services.
  • Specifically, SmartAsset's primary form of revenue generation is through its SmartAdvisor platform.
  • Apart from this key source of compensation, SmartAsset also earns fees from "advertising" or "promoting financial products" such as personal loans.
  • However, an extensive review of SmartAsset's owned media channels, credible media sources and industry reports indicates that more detailed information about the company's fee structure for advertisers is not publicly available.

Pricing for Personal Loan Services

  • All of SmartAsset's products and tools related to personal loan services are free for customers to use.

Funding

  • According to Crunchbase, SmartAsset has raised a total of $51.4 million over six funding rounds.
  • The company's latest funding round was a Series C round, which closed in June of 2018 and raised $28 million.
  • Meanwhile, the company's key investors are Contour Venture Partners, Fitz Gate Ventures, Focus Financial Partners, IA Capital Group, Javelin Venture Partners, New York Life, North Bridge Venture Partners, Peterson Ventures, Quotidian Ventures, TVV Capital, Transamerica Ventures and Y Combinator.

Key Differentiators for Personal Loan Services

  • According to SmartAsset co-founder and CEO Michael Carvin, the most significant differentiator for the company is its patent-pending Automated Financial Modeling (AFM) technology, which Mr. Carvin calls a "game-changer for consumers."
  • Specifically, the company's AFM technology simulates how different decisions will impact a user financially, offering potential customers a unique and highly personalized incentive to engage with SmartAsset over other competitors.
  • Additionally, SmartAsset offers its personal loan services free of charge to customers and, while it accepts referral fees from advertisers, the company has a public commitment to "maintain editorial integrity" across all user services.
  • Not only does SmartAsset clearly label any partner or advertising content, the company does not allow its recommendations to be influenced by its compensation and provides multiple options to users without any bias.
  • Meanwhile, the company is also the "first digital lead generation platform" for financial advisers and the "most-viewed" source of personal financial information online.
  • As such, its reputation and wide audience may also help attract business for its personal loan services.

Technology

  • SmartAsset delivers its services through the company's website.
  • According to SimilarWeb, the company's website is ranked 7,056 globally based on its approximately 8 million monthly visits, primarily from users in the US.

Finder

Planned Expansion / Strategic Initiatives

  • The most recent available interview with Finder co-founders Fred Schebesta and Frank Restuccia highlighted that the company is releasing a new comparison app in February of 2020.
  • At present, it appears that this app is pending launch, and that customers can engage through the company's wait list.
  • Less recently, in 2018, Mr. Schebesta also discussed the company's plans to expand into Asia as well as potentially into cryptocurrency markets.
  • Meanwhile, Mr. Schebesta announced in an October of 2019 interview that the company has no plans for an IPO, and continues to be entirely focused on growing the business through private investment.

Compensation Model for Personal Loan Services

  • According to Finder, the company makes money in three ways: (1) referrals to third-party products or services, (2) banner or other advertising through its website and (3) partner-sponsored content.
  • Overall, the company's compensation model for personal loan services is therefore centered around vendor advertising, and ranges from visual displays to actual customer referrals.
  • While this advertising does impact the ordering or placement of product information, Finder maintains that this compensation model does not influence how it discusses or reviews personal loan and other products.
  • Meanwhile, an extensive review of Finder's owned media channels, credible media sources and industry reports indicates that more detailed information about the company's fee structure for advertisers is not publicly available.

Pricing for Personal Loan Services

  • All of Finder's products and tools related to personal loan services are free for customers to use.

Funding

Key Differentiators for Personal Loan Services

  • Despite the fact that Finder advertises itself for American consumers, one of the company's significant competitive advantages is that it has a significant foothold in Australia, given the fact that its two founders are Australian natives.
  • Specifically, this Australian heritage has led to multiple Australia-based awards (e.g., three Australian EY Entrepreneur of the Year awards) and generated significant regional traffic for the company, with approximately one-third of Finder's monthly visitors coming from Australia.
  • Additionally, the company appears to benefit from its open practices for engaging both customers and potential partners.
  • Not only does Finder allow users to access and benefit from its resources free of charge, the company similarly allows partners to work with the site without sign-up fees, subscription cots or lock-in contracts.
  • As a result, Finder has attracted many global brands to its business, including American Express, Allstate and LendingClub.

Technology

  • Finder delivers its services through the company's website.
  • According to SimilarWeb, the company's website is ranked 12,926 globally based on its approximately 6 million monthly visits, primarily from users in Australia.
Part
02
of four
Part
02

Personal Loans: Wallet Hub and Consumers Advocate

Both WalletHub and ConsumersAdvocate.org are websites that list and recommend personal loan lenders without charging its users. Information regarding the companies and their offers related to personal loans are provided in rows 9-10, columns B-I of the attached spreadsheet.

Selected Findings


Research Strategy

Both WalletHub and ConsumersAdvocate.org have not publicly disclosed any funding history, strategic initiatives, and upcoming plans to expand into new categories or products. We were unable to find relevant information after exhaustive screening through annual reports, press releases, acquisition histories, and interviews of management for both companies. However, we've found that the following paywalled article featuring WalletHub's CEO may contain useful insights for the company dated over two years ago. We also referred to funding and acquisition databases such as Crunchbase, Owler, and Dealroom to confirm that funding information for both organizations and their parent companies were not available. Considering both companies do not generate revenue from lending operations but through advertising and referral fees, it is possible that they do not require venture capital funding.
We've also verified that both companies do not publish any APIs to engage with their customers by conducting a thorough search on their websites.
Part
03
of four
Part
03

Personal Loans: The Simple Dollar and Credit.com

The required information for The Simple Dollar and Credit.com have been provided in rows 11-12, columns B-I of the attached spreadsheet.

The Simple Dollar

  • Aside from the fact that The Simple Dollar (TSD) is hiring, there seems to be no other information publicly available online that could suggest any expansion planned by the brand.
  • TSD provides resources (articles, reviews, rankings, etc.) related to financial products for free. However, the brand receives referral/endorsement fees from some financial products they write about.
  • Additionally, an opt-out-of the-sale-of-your-information page suggests that TSD possibly earns money through selling users' data as well.
  • TSD does not provide personal loan services/products.
  • The Simple Dollar was among the brands of Soda LLC, which was acquired by Red Ventures in 2016. Red Ventures' latest reported funding round was in January 2015, where it received $250 million.
  • The key differentiators of TSD include having high viewership of around one million visitors per month, being ranked as a "Top Ten Personal Finance Blog on Kiplinger and in the Technorati Top Twenty for business and finance blogs," and having been "featured in some of the world’s largest publications."
  • The Simple Dollar website has dedicated pages for credit cards, loans, insurance, banking, and investing products. Each page has a layout that organizes information like TSD's product review, TSD's ranking of the product, and links to the product's websites. TSD also has a blog that seems to be updated regularly.
  • The company does not offer any mobile app or API options to engage with customers.

Credit.com

  • In 2019, Credit.com and QuinStreet, Inc. announced a partnership deal, that will make Credit.com an exclusive user of QuinStreet’s proprietary technology for matching consumers with appropriate personal loan options.
  • The brand, according to its advertiser's disclosure, receives compensation for the financial products and services advertised on its websites if visitors apply and sign up for them.
  • Credit.com advertises personal loan products through the GuideToLenders, and the products are "from companies from which GuideToLenders may receive compensation." The pricing for personal loan product, as per the advertiser's disclosure, varies according to the status of the applicant and the lender that matches him/her.
  • Credit.com is a brand of Progrexion Holdings Inc., and as per its Crunchbase page, its funding status is M&A or merger and acquisition.
  • The brand offer free services that will show users credit reports, analyze their credit score information, and alert them of changes. Credit.com assigns grades to user's "payment history, debt usage, credit age, account mix, and credit inquiries." The grade report lets users get a quick idea about their standing in each category.
  • Credit.com website has dedicated pages for credit cards, loans, and personal finance products. There is also a page for fixing credit linked to its sister brand CreditRepair.com. Aside from QuinStreet, Inc. proprietary technology, Credit.com also uses other technologies, such as Google Analytics, Google Tag Manager, and WordPress.
  • The company does not offer any mobile app or API options to engage with customers.

Research Strategy

To provide information on how The Simple Dollar's and Credit.com's personal loan offerings compare, we first looked at the brand's websites, hoping to find annual reports or investor presentations that could reveal vital information like the brands' expansion plans. Unfortunately, both brands do not offer these documents on their websites. Being private companies, the two also did not have SEC filings available.

In our search on the brands' websites, we found information about their compensation modes and other required data. The Simple Dollar's blog site and news page both seem regularly updated, but no news about expansion was found. On the other hand, Credit.com and its parent company Progrexion, both have outdated news pages. So, we checked other business news websites for articles that may have reported the brands' expansion plans. With this strategy, we found the partnership announcement of Credit.com and QuinStreet, Inc. and another article about Progrexion being recently found "guilty of fraud for its practices of sending mass credit disputes to collection agencies."

For the rest of the information required in the spreadsheet, we consulted business intelligence websites like Craft.co and Crunchbase.
Part
04
of four
Part
04

Personal Loans: Credible and Funding Hero

The required information for Credible and Funding Hero have been provided in rows 13-14, columns B-I of the attached spreadsheet. Both Credible and Funding Hero do not charge customers for personal loan products.

Selected Findings

Research Strategy

The information for Funding Hero’s upcoming/planned expansion plans into new categories or products, strategic initiatives planned, and funding history are not publicly available. Better Impression is the creator of Funding Hero. To identify the required information, we first examined content published by Funding Hero and Better Impression on their websites, Funding Hero’s Twitter page, and Better Impression’s Facebook page. As these sources did not publish any information about upcoming/planned expansion plans, strategic initiatives planned, and funding, we next examined third-party sources. A press search did not reveal any upcoming/planned expansion plans or strategic initiatives planned. As an examination of business databases such as CrunchBase and ZoomInfo did not provide Better Impression’s funding history, we could assume that Better Impression/Funding Hero has not received venture capital funding.
Sources
Sources

From Part 03