Peer-to-peer financier hits landmark €250m in loans, but its ambitions go far beyond that, says CEO Nile O’Grady
Inside, Linked CEO Niall O’Grady outlines new breakthrough numbers for peer-to-peer financiers. Since his debut ten years ago, he has just reached €250 million in total loans.
The shelves behind him are lined with high-profile, up-and-coming Irish brands that have benefited from a peer-to-peer lending model that has operated for a decade. Chopped, The Happy Pear, Rory & Cooks, Whiplash from Balifermott Craft Brewery, Bear Market His Coffee, Rolling His Donuts, just to name a few.
Linked has seen significant year-on-year growth in recent years, especially with both KBC and Ulster Bank exiting Ireland. In 2020, the loan amount was just €19 million. The next year it was 36 million euros and last year it was 45 million euros.
Half of the money Linked has to invest comes from private equity funding, while the other half comes from Irish private investors.
“This year we have a target of €65 million and we are well on our way to achieving it. We want to exceed 100 million euros by the end of the year.”
O’Grady said reaching €100 million in annual lending would be a major milestone.
“I think that will give us some scale and we can negotiate rates better. We can also look at entering new markets, new products, etc. We will be able to provide a one-stop solution for the financial needs of small and medium-sized enterprises.”
Loans are up 90% in the first half of 2023, but he’s not ready to schedule when Linked will hit the bigger milestone of €1 billion in total loans. But if it follows its current trajectory, it could certainly be within reach in four to five years, he agrees.
“It’s a virtuous circle. Much more valuable than advertising.”
Growth comes with tighter scrutiny.
The company is currently about to be regulated by the central bank, but the move opens the door to many game-changing possibilities, including the possibility of accepting pension fund money, according to O’Grady. It is said that it will happen.
This could also enable future mergers and partnerships with other peer-to-peer financial firms in Europe and the UK, he said.
The company is now about to be regulated by the central bank. According to O’Grady, the move opens the door to many innovative possibilities.
“We do not pre-empt the regulatory process, but we are secretly confident that we will be able to complete the regulation by November.
“This is a difficult process, as you would expect to be negotiating with a central bank. But overall, perhaps the last three years have been exploring regulation of the sector because the reputation of the sector is vital. I’ve been.”
“I think any organization in the alternative lending space should be regulated through the regulatory framework we are going through, or something else.”
Regulation has very real benefits for business.
“We can talk to some funders, such as pension funds, but then the organizations they partner with will need to be regulated. It’s a big win for
“And secondly, this is an EU-wide regulation, so perhaps next year we may start discussions and partner with other international peer-to-peer financial institutions.”
“So why not be part of an international peer-to-peer lending organization that spans continental Britain and Ireland, for example?”
Linked is already exploring possibilities, both in terms of new funders and international opportunities.
“We have had initial conversations with them.
“But I know who to talk to, so I’m going to have those conversations next year.”
We are, in a way, the fintech version of credit unions
Mr. O’Grady is reluctant to provide further details when pressed.
“We have no plans, we are just having discussions and looking at opportunities. But even if it does happen, it will take years to come.”
But the idea of working with other peer-to-peer players in Europe would bring advantages, he explains.
“So if we have a requirement of €65 million this year and somebody in Germany has a requirement of €235 million, I’m just making up the numbers here, but suddenly they Combined, winning the €300m requirement could result in better negotiations with funders.
“It could enable lower-cost financing, which could be passed on to borrowers at more competitive interest rates, which would in turn accelerate corporate growth.”
A second advantage is the potential sharing of platform and technology costs. He cites the UK, Spain, Italy and Germany as markets with particularly developed peer-to-peer lending markets.
“In fact, it opens up new opportunities for retail investors as they can start looking to invest in UK and German SMEs.
“But again, international expansion is not a top priority for our business at this time. Our top priority is to continue to grow and support small businesses in Ireland.”
“The great thing about C&C was the entrepreneurial spirit.
O’Grady was headhunted by insurance giant RSA two years ago to serve as MD for the disruptive 123.ie brand. He first heard of Linkt several years ago through his family connections.
His father, a former bank manager who died two years ago, was not in the habit of talking to his son about financial services.
“He was more likely to tell me about Cavan GAA. But he had come across these ads on Linked Finance about seven years ago.”
Growing up as the son of a bank manager, moving home was a reality. His father served at Dundalk, Athy, Kildare and New Ross, County Wexford.
O’Grady wanted to work somewhere other than a bank. After graduating from university, he went to Brussels and worked for the European Commission in the field of telecommunications before moving on to a sales and marketing position at Procter & Gamble in France.
“I worked on young skincare like Viaactol and Clearasil, then products like Wash & Go and Pantene in hair care.”
Really small disruptors like us must create destruction, raise awareness and build credibility.
He returned to Ireland where he worked for Cantrell & Cochrane for brands such as Bulmers, Ballygowan and Miwadi.
“The great thing about C&C was the entrepreneurial spirit.
After that, he became a member of Eternal TSB while the Celtic Tiger roared. 2012 was a rough time. “
But in the marketing department, there was some protection as the focus shifted from selling mortgages to attracting deposits and building an e-commerce platform as part of efficiency gains.
In 2017 he moved to 123.ie, and from there brought an understanding of digital disruption and a belief in “simplifying everything, providing great customer service, and automating as much as possible.”
Half of the money Linked has to invest comes from private equity, while the other half comes from Irish retail investors who use digital platforms to track their investments in all Irish SMEs. It’s from
“People poured in everything from €150 to €50,000. I like to know what there is.
“People recognize local businesses, so they invest in them.
He moved to 123.ie in 2017 and brought his understanding of digital disruption from there.
The pandemic has brought a whole new focus to this kind of community-oriented investment.
“Covid has been great for us. It brought everything to life. That whole sense of community came to the fore.”
He said the company has about 1,000 very active lenders that are active on a daily basis and about 7,000 lenders that lend less frequently but are still active.
“Almost all of them started with €5,000 or €10,000. Some of them now have a deposit of €100,000 on the platform.
“Our relationship with them is very close and very warm. In the last four to six weeks, I have spoken to about 150 of them. It has a bit of a community vibe, it’s tech-driven, but it also has old-school values.
“I think there is an opportunity for the alternative lending sector over the next three years with the exit of KBC and Ulster, but something like this may never happen again. is growing, and some financial institutions, like ours, are now really starting to hit the pedals.”
But as interest rates continue to rise, there is no sign of stopping and stress points are emerging, he agrees. Bank deposit rates, for example, haven’t risen significantly, but if they do, Linked may need to do more to attract investment.
COVID-19 has been great for us. It brought everything to life.The whole sense of community came to the fore
For now, the frenzy of small business in the city center continues outside the office windows, and with consumer confidence still strong, Linked and its small business borrowers see an opportunity. It is a sign.
But O’Grady keeps a close eye on the domestic economy.
“Undoubtedly, in highly discretionary areas, such as eating out at restaurants, discretionary spending decreases as bills rise.
“We are seeing it and we have to keep a close eye on it and often find that restaurants, for example, are only open four days a week.
“Initially it was because we couldn’t get the staff to work.
“And what they’re doing is cutting costs to match the bottom line. So this is a mature and good move.”
O’Grady said the company constantly changes its watch list of potentially problematic sectors. Tourism, hospitality, and construction have been the occasional focus lately, but for now, the retail sector is the main focus as the post-COVID-19 digital future continues to unfold.
But O’Grady says that doesn’t dampen his optimism.
“The good thing about small businesses is that they always feel like they have to be better than the big ones in order to win the business.
“If you’re a big company, you have to know what you’re doing. You need to raise and build credibility.
“For the word to spread, we need those who give us money or borrow money to become our supporters.”
resume
name: Niall O’Grady
age: 58
from: New Ross, County Wexford
live: Blackrock, Dublin
family: Married to Aoife, they have four children, Nicholas, Molly, Ella and Peter, aged between 21 and 28.
education: St Joseph Academy, Kildare. Good Counsel College, New Ross. followed by BComm and MBS from UCD
hobby: tennis and cycling
Favorite book: “Small Things Like These” by Claire Keegan
Favorite movie: “The Unbearable Lightness of Being”
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