Many people believe peer-to-peer business models only exist in the world of finance. Yet, over the past decade, more and more p2p businesses have popped-up in all areas of business. This is because the peer-to-peer economy operates in a model when two individuals interact directly with each other to conduct business. If two individuals conduct business directly to exchange money for staying in a home (Airbnb), this is a form of p2p business.
With that in mind, let’s look at what is going on in the peer-to-peer world this month!
A recent report by research firm IndustryARC estimates the p2p lending market will hit $370 billion by 2025. Peer-to-peer lending has become a standard in all areas of consumer lending, including real estate and student loans.
IndustryARC goes on to explain how p2p transactions provide significant benefits when compared to standard banks:
“P2P lending is advantageous over the conventional bank transactions. A P2P lending platform connects borrowers and investors directly for better returns in a P2P transaction than that of the bank. Furthermore, P2P lending services provide the investors with risk-adjusted returns. The easy loan tenure and the fact that investors can get regular and stable income in month-on-month returns in the form of principal repayment and EMI is attracting more investors in the P2P lending market.”
However, this number pales in comparison to $898 billion that Transparency Market Research (TMR) estimates the p2p market will bring in by 2024. TMR believes the industry will have a compound annual growth rate (CAGR) of 48.2% for the 8-years leading up to 2024.
Regardless of whose projections turn out correct, one thing is certain; peer-to-peer lending is going to be a huge industry to watch out for in the coming years.
Catch a glance at Bondora’s real-time statistics to see how we are growing right alongside the p2p industry.
Car-sharing has been one of the fastest-growing p2p markets over the past few years. This month, one of the industry’s up-and-coming players, Turo, raised $250 million in Series E funding to grow its business. The funding round, led by media and internet company IAC, puts the company’s valuation at over $1 billion.
According to Turo’s VP Michelle Peacock, the traditional rental car experience is ripe for disruption, not only for renters, but those looking to utilize their cars as cash-generating assets:
“I mean, renting a car is usually a terrible experience all the way around. You get to stand in a long line, wait your turn and then you get to accept whatever car they hand you.”
“There are 7 million Americans out there right now behind on a car payment, and we give them an easy way to put that asset at work for them. We think we can change the relationship Americans have with the cars in their driveways, and really democratize automobile ownership,” Peacock said.
As peer-to-peer markets find success, opportunities for p2p activities are rising to the surface. Take Loopie as an example. The company connects users who don’t have the time or energy to deal with their laundry to those who have the extra capacity to clean laundry for others. This has bridged the gap for users and created an entirely new p2p market.
“Obviously Loopie is a dual-benefit venture as a peer-to-peer laundry service where we can provide a platform and an opportunity for washers to make income from the comfort of home and on the flip side, anyone who hates doing laundry or doesn’t have the time, we’re able to remove that problem.”
For Loopie, the business model is ingenious. The company does not have to own any of its own washers and dryers themselves, and instead, simply connect users together to handle dirty laundry at a set price, taking a fee for their service off the top. Currently the service is in its beta stage and only available in the Seattle area, but the company plans to expand its services in the coming year.
RateSetter, an Australian p2p solar lending company, recently received a $200,000 initial investment from Future Super, a fossil-fuel-free investment fund. RateSetter is already on its way toward success in the Australian market, as it signed a $100 million deal last year with the Clean Energy Finance Corporation to lend money to those in the south of the country with the explicit intent to invest in batteries and other start-up costs for solar power to reduce the costs for consumers.
Future Super is excited about the potential for linking renewable energy services in a p2p model:
The fund’s founder Adam Verwey said an investment of just 7.7 percent of Australia’s superannuation savings could help fund the country’s transition to using 100 percent renewable energy.
“At Future Super, we have strict ethical investment criteria that we follow when adding to our portfolio, and we choose options that we believe will produce superior returns for our members, while also positively impacting the environment,” he said.
Peer-to-peer exchanges continue to grow in the world of cryptocurrency. This is especially true in countries where foreign fiat currencies are banned. In Zimbabwe, all foreign currencies are banned, which has led to a drastic increase in p2p crypto trading.
Citizens in Zimbabwe see Bitcoin as a better store of value than the Zimbabwe dollar (ZWD), and therefore are seeking out ways to transact in the digital currency. This has also helped shore up liquidity, which has been hard to come by in the country.
“What we are seeing is that there is a lot of demand for bitcoin,” Tawanda Kembo, CEO and founder of the Golix crypto exchange which was affected by the central bank’s directive to ban exchanges from crypto trading. “And there is little supply compared to demand so all the activity in bitcoin which we are seeing is happening on dark markets instead of exchanges,” he added.
This means traders and facilitators in bitcoin trade are still processing “a lot of transactions over the counter” and on a peer to peer basis. “I don’t know of any crypto exchanges that have any significant volume (in bitcoin trades),” says Kembo.
Peer-to-peer Bitcoin trading is on the rise, according to a report from the p2p exchange Paxful. In its report, the company cited $65 million in p2p Bitcoin trades in the first half of 2019. This equates to almost double the exchange’s trading volume for the same period last year.
It appears that Africa is proving to be the biggest market for such trades:
“Nigeria and Ghana are in our top markets, and these markets have seen the entrepreneurial opportunities bitcoin and P2P can offer,” Paxful CEO Ray Youssef said in an interview.
As for why people in these countries would benefit from exposure to Bitcoin, Youssef explained that Nigeria and Ghana are both countries “with limited banking resources and broken financial systems.”