Huddle Capital was a new kid on the block which launched at the 2017 Master Investor Show back in March. You probably visited us at our stand and felt the excitement around this launch event, which was a significant milestone for us.
Huddle Capital chose the Master Investor Show as its launch platform, in light of the market presence that the show has, and the access to over 60,000 investors that this offered us.
Huddle Capital was founded by Terry Fisher, a high-profile entrepreneur who has successfully built and sold several businesses, and Jay Tikam, a Corporate Executive turned London-based Fintech entrepreneur. Huddle is a peer-to-peer (P2P) business lender that helps individual and corporate investors lend to UK-based small and medium sized businesses.
At the time of launch, the peer-to-peer lending market was already reaching a peak, and the early entrants were already surging ahead of us. However, despite the tough market conditions at time of launch, we have achieved remarkable success.
We’ve been truly amazed at the success that Huddle Capital has achieved in such a short space of time.
- We launched the Huddle 100 campaign, offering a truly market beating cash back incentive to the first 100 founding investors on their platform. The campaign promised a staggering 20% cash back to investors and to date, all investors have received their bonus into their account.
- Club Red was launched as an exclusive membership club for progressive investors who invest more than £25,000 per annum through the platform. This Club offers unique benefits and events, as well as an opportunity for investors and business borrowers to network.
- Huddle Capital attracted more than 100 investors to the platform within 30 days of launch. These were not just users registering interest, but investors, putting up cash on the platform to invest.
- We listed two loans totalling £365,000 which were each fully funded within 30 days of being promoted on their platform.
- We received a very positive response on the P2P Finance Forum, with many investors showing support. From feedback on the forum, it was clear to us at Huddle Capital that investors welcome a fresh approach in the P2P lending space.
Like all new businesses, Huddle Capital was not immune from initial teething problems, but we swiftly dealt with these.
A look into the Huddle 100 Club
The Huddle 100 Club was a driving force in our launch success. It was devised as a clever campaign to get quick market traction after launch. The scheme offered the first 100 investors automatic lifetime membership to Club Red, and offered 20% cash back on investments up to £5,000. So lenders who invested this full amount received a massive £1,000 cash back in their user account.
Club Red will continue to offer a £1,000 reward for investors who invest £25,000 or more. It will also provide a mastermind platform for investors who wish to network and learn from one another. Regular get-together events will also help investors meet and engage with borrowers, receive promotional offers, and gain access to exclusive events. Club Red will evolve its membership benefits as it gets more traction and feedback from investors.
What’s driving Huddle’s success?
Huddle launched into a crowded market, competing with existing, bigger platforms that had already established a brand and name for themselves within this fast moving industry. Like all mature markets, the peer-to-peer lending market quickly matured to have three to four dominant players at the top, leaving the rest of the industry in a cloud of dust as these dominant players power on.
So to launch in such a market was a very brave move on our part. In a space where new platforms really struggle to gain any traction, let alone build a successful business, how did we succeed in our launch?
Upon reflection, we’ve distilled the following core reasons for the successful launch of Huddle Capital:
- Our external market presence confirms that Huddle Capital is aiming to bring a fresh approach into a market dominated by a few incumbents within this space. Rather than focus on advertising, we at Huddle believe in reaching more investors by educating the market. A potential investor, sitting in a tube carriage in London, looking at a P2P platform advert is not going to invest just because they saw the advert. P2P is a totally new asset class that only a few understand and have invested in. So our strategy was to bring more investors to this market, by first empowering them through education. Over time, we aim to bring a significant number of new investors into this market.
- Unlike most startups, Huddle Capital was not constrained by resources. With backing by a parent who is already a balance sheet lender to small and medium sized businesses, our founding team launched with significant experience and networks to easily bring quality borrowers to the platform. We also received financial backing from our parent to absorb the cost of the setup and launch, as well as the funds needed to get investor traction, mainly through the Huddle 100 Club offer.
- Through leveraging the experience and networks of our parent company, Huddle has a ready-made network to source high quality borrowers – something other platforms struggle with, especially in the beginning.
- At Huddle, we aim to bring higher yielding returns for investors. For example, the first two loans on the platform both offered investors 12% gross annual interest rates (AER), compared with an average 7% return from the overall P2P lending market.
- Finally, Huddle offers “instant returns” to our investors – in other words, investors start earning interest from the point they pledge their investment to a specific loan. Usually, loans take 30 days to fill up, and in this time investors continue earning returns, regardless of when the actual loan closes.
Why investors should consider P2P lending as part of a balanced portfolio
At Huddle, we are a new player in a market which has moved from being alternative to mainstream. Peer-to-peer investors have, on average, earned around 7% interest and platforms such as Huddle are aiming to bring higher returns to investors. Naturally, this needs to be balanced by the risks associated with the higher returns.
We recommend considering P2P lending as part of a balanced portfolio, as it offers the chance to diversify your investment portfolio, earn higher returns, and bring a greater income component as loans are repaid with interest monthly. Platforms like ours at Huddle Capital bring an added benefit by providing education and the ability to network with other like-minded investors as well as borrowers.