The end of the year is always a good time for introspection.
It’s a difficult exercise for entrepreneurs. By nature the entrepreneur only remembers the near past and has a natural tendency to forget more distant events and difficulties. Yet, looking back at the figures for 2019 is interesting because of how differently the year ended compared with its first few months: we lent twice as much in Q4 as in Q1.
To illustrate it another way, December was the best month in our history and 500% higher than January 2019. We lent a total of 18,000,000 euros over a month (which was socially turbulent in France and short in open business days in all the countries where October is present).
In 2019, 129 million euros were lent by our community of institutional lenders and 19,525 active individual lenders to 227 European companies. That is almost one company supported every working day. In the next few weeks we will breach the symbolic 400 million euro lent threshold.
Let’s take a step back and look at the major trends over the last 12 months.
2019, a European year
2019 was marked by a strong strengthening of our European footprint:
- We celebrated our first full year of operations in the Netherlands
- Our German team is now fully operational from Munich
- The European Investment Fund (EIF) and Bpifrance in 2019 have supported the growth of European SMEs by lending on October. Never before have so many leading institutions recognised the usefulness of our action. A source of pride for our teams and a unique boost for European entrepreneurs
2019, a year of increased financial firepower
2019 was marked by the launch of our IVth generation institutional pocket, with an initial commitment of €115 million from the EIF, Bpifrance, CNP Assurances and Zencap. This comes on top of €30m dedicated solely to the Italian market, set up in partnership with five Confidi and still the EIF
2019, a year of technological breakthroughs
2019 was marked by many developments in our technology. In particular, we released a new version of the application for borrowers, the most sweeping update since the creation of October. A new credit scoring algorithm was put into production, based on 5 years of accumulated data, which allows us to better filter and target companies, and to lend to more of them.
Beyond technology, we constantly rethink each process to make it more efficient and above all we take care to measure its application and efficiency directly (the famous “SLA”, Service Level Agreements). This obsession shared by all the October teams has enabled us to reduce the time taken to process a credit file by a factor of 3 over the last twelve months.
What to expect in 2020
An even more European year
We at October have had a strong belief in Europe for 5 years. We have built our “Erasmus of financing “, despite sometimes complex national regulations. October remains the only platform to allow a Dutchman to lend to a Spanish or Italian company in 2 clicks or a Frenchman to become the “banker” of a Dutch company. This deep conviction should now be facilitated by the coming single regulation at the European level.
An even more tech-driven year
Undeniably, the experience of an October borrower is unique – thanks to technology simplifying the often complex steps of the loan process. Not only are we full of ideas to make it even better, but we have no taboos in changing what we do or what the market sees as unchanging practices. We intend to continue along this path in 2020.
Pricing, pricing, pricing
We operate in an industry where price (= interest rate) has been – and still is – one of the main drivers of choice. The October experience is now unparalleled, but we can still lower the cost. We are convinced that we must offer lower rates to the strongest borrowers. It sounds ambitious: the best user experience at the best price. Yet this will be our obsession in 2020. It will be our obsession to make October first choice for all entrepreneurs. And we also have some original ideas here.
We leave the final word to one of our borrowers, Mon Concept Habitation: “We got our credit before we got any offers from our bank, our 10 year old partner.” The best compliment we can receive when our mission is to simplify and democratize the financing of European companies.
Best wishes to all of you! May 2020 see your dreams and entrepreneurial wishes come true.