LendingHub Australia Original Pitchdeck from Sep 2008

LendingHub Australia Original
Pitchdeck
Ivan Mantelli
ivan@kapitalized.com
LendingHub Overview
September 2008

Background to this pitchdeck
This presentation was written in September 2008 for the LendingHub peer
to peer lending platform pitch to interested partners.
LendingHub launched in 2009 with its own proprietary platform and showed
early promise with both lenders and borrowers active on the market.
LendingHub was one of Australia’s first P2P lenders, however it was too
early to market and was at a time that Australian investors could not see a
future in online or P2P loans.
This document is provided purely for information purposes by Ivan Mantelli
(original co-founder and CEO).

Lending Hub - Private & Confidential 3
Executive Summary
• Lending Hub is a novel online distribution platform for plain vanilla personal loans with no direct (online)
competitors yet in the Australian market
• The current sub-prime credit crunch is creating an opportunity for new entrants
• The challenge is to create an online community with a clear first mover advantage and liquidity of
listings and user activity
• Educating consumers will be central to our messaging theme as this will drive trust and familiarity
• Our marketing approach will be principally focussed around friend & family, low cost, organic activities
that are intended to create a true grass roots or viral marketing campaign
• We need to generate a buzz around the peer to peer concept that leads to news articles and blog
comments that leads to user interest which will drive a great deal of free traffic
• The majority of our marketing initiatives will be online and low cost with a view to creating a large
footprint (from links back from other sites) and ensuring that the site is search engine optimised (SEO)
• Some paid online advertising and paid print advertising will be used sparingly with an emphasis on ROI
given the high cost of these initiatives and likely low initial conversion rate

Table of contents
1. Concept Overview
2. Positioning
3. Marketing strategy

What is Peer to Peer Lending?
• Peer to peer lending is when individuals lend funds to other individual
– No banks are involved but a broker usually manages the lender-to-borrower relationship
– Interest rates are usually lower for the borrower
– Low credit grade borrowers are able to access funds
– The marketplace sets the ‘right’ risk premium
– Investors can help “mates” and access an alternative high-yield product
• This concept has been proven in US and UK
– There are several players in US and EU that have quickly established a loan book and client base
(Prosper.com, LendingClub.com and Virgin Money in US and Zopa.co.uk in EU)
• The current sub-prime credit crunch is creating an opportunity for new entrants
– Banks are increasing interest rates and are very selective in their lending
– Non-bank lenders find it difficult to fund new loans
• There is no true online lending model yet in Australia
– Banks and non-bank lenders still use manual documents and phone/fax systems to originate
loans

How does it work?
Lenders Borrower
The marketplace that
brings together lenders
and borrowers:
•Loan listing
•Bidding
•Settlement
•Communication
•Documentation
•Loan Management
Each lender
funds the loan,
e.g. $100 each
Lending Hub
collects funds
and transfers
$500 to the
borrower
Borrower repays
loan each month
Lending Hub
sends proceed to
lenders (net of
fees)
Platform
• The platform will provide all the services required to originate, settle and manage a loan

The personal loan is a large growing market in Australia
The personal lending market has grown at a CAGR of 8.3% from FY03 to FY07
Source: Australian Bureau of Statistics
Australian personal loan market size and growth
2
0
2
2
2
2
2
0
2
0
2
1
2
5
2
9
3
2
3
6
4
3
4
6
5
2
5
3
5
8
6
9
7
9 7
3
7
5
8
0
0
10
20
30
40
50
60
70
80
90 FY8
8
FY8
9
FY9
0
FY9
1
FY9
2
FY9
3
FY9
4
FY9
5
FY9
6
FY9
7
FY9
8
FY9
9
FY0
0
FY0
1
FY0
2
FY0
3
FY0
4
FY0
5
FY0
6
FY0
7
LoanAmount($bn)
Personal finance

The initial target market will be on the debt consolidation, auto
finance and revolving personal loan categories
The target market size is approximately $35bn
Personal Loans by Category (Australia)
($000s)
Source: Australian Bureau of Statistics
Fixed (Other),
9,750,529,
12%
Fixed (Unsecured
Homes), 484,838,
1%
Fixed (Debt
consolidation),
3,952,495,
5%
Fixed (Residential land),
4,926,137,
6%
Fixed (Cars), 9,581,634,
12
%
Revolving (Unsecured),
21,910,957,
28%
Revolving (Secured),
21,093,211,
26%
Fixed (Refinancing),
8,361,343,
10%

There are three key challenges for building a P2P platform in
Australia
FIRST TO
MARKET
CLEAR VALUE
PROPOSITION
GAIN
CTITICAL MASS
• A compelling USP is required for both borrowers and lenders
• The site must offer a simple and intuitive user interface that is ‘friendlier’
than the banks
• Clear messaging combined with education is critical to user uptake
• Achieving a first to market leadership position is critical for digital
businesses
• None of the potential local or international contenders are developed yet
• Targeted launch date in April 2008 will give us a good chance of becoming
the #1
• Achieving liquidity of borrowers and lenders will create an effective
marketplace
• Our core objective is to create onsite activity and repeat lending/borrowing
activity
• Achieving the critical mass of listings will provide a significant barrier to
entry

Where Lendinghub.com.au fits into the Australian personal
loan market
VirtualPhysical
Lower rates
Higher rates
rates
Business Model
Wizard
Virgin Money
Regional
banks
Major banks
BankWest CreditMart
(online credit
card broker)
Auto
Financiers
GE Money
Shops
Pawn brokers
Lending
hub
Target
Market
Flexirent
Store Cards
iGrin
PeerMint (not
live)
Fosik

Online competitors
Players
Current loan
portfolio size
Launch date Quality of site
Financial
strength
Comments
iGrin $170,000 Oct 2007
(Not fully functional)
Low Low • Highly manual process
• One man show
• Low quality site
Fosik Lending NA Early 2008
(not fully functional)
Low/Medium Low • Only a small component
of the site is live
• lending platform is not
live
Peer Mint Not live Not live Not live Not live • Not live
There are no serious P2P players in Australia

There is a dual target audience (borrowers and lenders) that
require a tailored marketing approach
Borrowers Lenders
‘Self-promotion’ tools will allow borrowers to market their loans to
potential lenders in particular friends and family
Borrowers are potentially easier to attract and to get
excited about the P2P concept
Lenders are harder to target and more difficult to attract
• Large base of potential borrowers
• Many borrowers dislike banks
• Often willing to shop around
• Will expend effort to get a loan
• Looking for alternative to banks
• Preference for simple products
• Exhibit a typical ‘consumer’ profile
• Smaller base of potential lenders
• Are somewhat risk averse
• Need to be convinced of investment merits
• Currently have investment alternatives
• Looking to maximise returns
• Are often relatively sophisticated
• Exhibit an ‘investor’ profile
• Friends & Family
• Debt consolidation
• No credit cards history … ie students
• Auto and vehicles financing
• Small businesses start up funding
• Home improvements
• Military
• Institutionalise friends and family lending
• Professional money lenders
• Small investors … share trade types investors
• Ethnic communities with an entrepreneurial culture e.g.
Chinese
• Banks

Building trust with members is critical to creating an active
online P2P community
• Successful online marketplaces such as eBay, Drive and Seek have created an online environment
where users are comfortable transacting goods and funds
• Building trust is of even greater importance to a peer to peer lending platform as users are potentially
exposed to:
– Uncertainty around identity and honesty of the counterparty
– Submission of personal information and bank account details
– Potential for investors to lose funds through borrower defaults
• A safe and secure environment that engenders trust will be built based upon:
– User education and ease of use (online tutorials, simple layouts etc)
– Enterprise standard security and encryption features to prevent hackers and security breaches
– Member (and in particular borrower) identity verification, credit checking and income verification
– Backend reporting systems to ensure detection of fraudulent activities
– A transparent system where members can see bidding activity, Q&As and report suspect listings
Creating a safe and secure trading platform is the basis for user trust which should
transfer into higher user activity and member referrals

Initially a common theme of ‘better rates’ and ‘safety and
security’ will apply
Message
1. Cheaper / Better Rates
2. Convenient to Use
3. Quick Decisions
4. Easy Terms
5. Pitch your own cause
Message
1. Better Interest rates
2. Safe to use
3. Help Others
4. Diversify Portfolio
5. Convenient to Use
Features
▪ Online presence, no Banks
▪ Simple loan product
▪ Auction based system provides best rate possible
▪ Maximise your self-promotion opportunities with text and photos
▪ Flexible Loan Terms based on credit rating
Lender Features
▪Online platform, no Banks
▪Alternative asset class provides better returns than shares
▪Compliance systems and controls
▪ Success Stories, past returns and customer testimonials
▪ Flexibility in choosing risk and return profile
▪ Auction based system lets you choose your risk premium
BorrowersLenders

The marketing strategy revolves mainly around online
initiatives supported by some low cost offline initiatives
Search Engine
Optimisation
Online Offline
Build Online
Footprint
Partnerships
Free Press
Releases
Paid Online
Marketing
High natural (free)
keyword rankings on
Google
Link backs from
search engines,
blogs, videos, articles
and other websites
Online and offline
partnerships to
generate referrals
and funding
Create a buzz with
journalists to get free
PR in traditional print,
TV and radio media
Pay Per Click (PPC)
advertising via
Google which has a
direct traffic – cost
relationship
Drives traffic
however will not
necessarily lead to a
higher user base
Critical to ‘getting found’
on the web when users
search through
Google/Yahoo

The initiatives are principally low cost, ‘grass roots’ activities
that we can action in-house
1. Optimise web pages, headers, URLs and text (SEO) to be easily readable by search engines
2. Be registered on the main search engines and ensure we are listed
3. Post comments and links on other relevant financial information blogs
4. Use the Lending Hub blog which positions us as an authority, costs little and greats great link backs
5. Create video interviews that can be broadcast on youtube and are more visually interactive
6. Google AdWords advertising to generate traffic once the site is search engine optimised
7. Create niche groups such as ‘Say NO to BANKS’ on facebook, Linked-in, etc
1. Promote through trade events such as the Investor Expo
2. Get articles written on us about the revolution of p2p lending, social lending and the threat to banks
3. Approach particular groups that can form partnerships and referals
4. Highly targeted ads in print products such as Smart Investor
Online
Offline
By targeting a lower profile set of initiatives we expect to create a buzz
amongst a niche group of online consumers that converts into an active user
base

We will provide our members with the tools and incentives to
create referrals
• Successful online communities generate significant word-of-mouth referrals and grow through ‘viral’ marketing (e.g.
Facebook)
• As is now common to most online social communities we will provide tools and systems for member referrals, emailing,
watching loans and bookmarking pages (e.g. Digg)
• In addition a Customer Testimonial tool/application will let users submit a testimonial about Lending Hub in return for a
small reward (value $25-$50)
• Feedback from users will be operated on a reward for positive contribution basis
• The Group feature will have a rating system to indicate the relative success and positive loan experiences (measured by
repayments and minimal defaults)
• Allowing users to post videos should provide a more interactive borrowing and lending experience (to be explored)
• Subscribe and RSS tools allow investors to be instantly notified of all new listing

Pursue a local strategy similar to GE personal loans
• A national marketing approach will be pursued for online activities however there are opportunities to target specific
locations initially that will allow us to reach our target demographic
• Sydney to be pursued initially followed by Melbourne
• Western suburbs have a number of working class families with high leverage seeking to refinance or consolidate
multiple loans
• Eastern suburbs and north shore have large numbers of Sydney’s professionals

Partnerships and affiliates can be leveraged to drive site traffic
• Building partnerships and affiliate networks both online and offline can generate significant referrals, trust and create
opportunities for new products and features
• Initially (3-6 months) targeted partnerships will be will online businesses in related or adjacent markets
– Emerging business news and information websites that are keen to extend their reach e.g. businessspectator.com
– Online financial service suppliers such as payment facilitators and credit information providers e.g. POLi
– Social networks such as Facebook and mySpace and business networks such as Linkedin.com
• There are a number of online personal finance websites that attract both potential lenders and borrowers
– personalloansaustralia.com.au and creditmart.com.au (loan comparison sites)
– moneybuddy.com.au (personal financial information)
– Sharescene.com.au and hotcopper.com.au (trading discussion forums)
• Generating funding liquidity is critical and longer-term we expect to explore the ability to build relationships or distribution
arrangement with Credit Unions and Building Societies
• Relationships with other offline businesses would enable us to build leads not dependant on Google and typical online
initiatives
– Master franchise type businesses that are assisting franchise applicants seek funding
– Home loan brokers
– Auto dealers
– Financial planners

Our current SEO, blog and linking activities have already allowed is
to capture the top position for several P2P related keywords
Current Keyword Positions on Google
Lending Hub is already ranked #1 on Google
Australia for the keyword ‘Social Lending’
social lending #1
P2p loans #1 and #2
P2P lending #2 and #3
peer to peer lending #2 and #3
person to person loan #4
borrow and lend #4 and #5
borrow online #9

Developing links from independent blogs and business news
sites will generate relevant traffic to Lending Hub
Reference Blogs Australian Blogs & Financial News
• http://www.p2pnobank.com/ [p2p blog aggregator]
• http://bankingreview.blogspot.com/ [blog]
• http://onlinebankingreview.com.au/
• http://ozrisk.net/
• http://www.wiseclerk.com/group-news/
• http://rbr.bankingreview.com.au/ [news]
• http://www.afr.com/home/opinion/street_talk.aspx
• http://www.p2ploansforum.com/forum/index.php
• http://www.prosperlicious.com/blogger.html
• http://wordpress.com/tag/zopa/
• http://technorati.com/blogs/www.p2p-kredite.com
• http://www.blog.lendingclub.com
• http://www.thebankchannel.com/
• http://www.banking-business-review.com/
• http://thebankwatch.com/
• http://blog.prosper/com
Currently Lending Hub already has links from a number of P2P lending blogs achieved through
relevant content and articles on the Lending Hub blog and providing other blog sites with articles
on the Australian P2P industry

Sample paid Google ad campaigns to attract Borrowers…
CAMPAIGNS
• Pay Student Loans
• Consolidate Credit Card payments
• Fast and Cheap Personal Loans
• Fix the house
• Buy new furniture, car or afford an holiday
Credit Card Debts
Consolidate all your debts
with a cheap loan
www.lendinghub.com.au
Easy Student Loans
Range of personal loans from the community
No Exit Fees! Apply Now
Cheap Personal Loans
Reduce your debts fast.
Peer to Peer Lending in
Australia now
Pitch Your Cause..
Don’t have the money?
Ger a fast cheap loan!
Loan from Community
Peer to peer loans
$500-$2000, apply now
P2P Loans
Cheaper than banks
Just do it online! Apply 24/7

Sample paid Google ad campaigns to attract Lenders…
CAMPAIGNS
• Diversify Portfolio, with a new instrument
• Target Expats - Australians living abroad wanting to benefit from boom in Australia
• Create a social impact by lending to the cause that matters to you
• Earn better interest Rates than the bank
• Trusted site with innovative features
Diversify Portfolio - new hedging
instrument - NO BANKS Involved
Peer to Peer lending in Australia
Invest with better rates with no extra risk!
Earn More and make a social
impact on fellow Australians
Get superior returns from
Peer to Peer Lending. Find out more.
Australian Citizen? Want to help
your fellow country men and earn
better Interest rates than US/UK?
Peer to Peer Lending in Australia now
Better Interest Rates
Safe and Reliable p2p lending
Invest Now!

A Facebook application provides a gateway for consumers to (the
US based) LendingClub.com
Lending Club in the US uses a
Facebook app that delivers about 25
referrals per day to their P2P site
➢ Facebook has a different open source application system than all the other social websites
➢ It will probably be necessary to build a separate application for the OpenSocial websites such as
Google and mySpace

LendingHub Australia Original Pitchdeck from Sep 2008

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LendingHub Australia Original Pitchdeck from Sep 2008