Let’s open a dedicated thread for Fellow Finance, which is in the IPO process. The company plans to list on Nasdaq Helsinki Ltd’s First North Finland marketplace! Finally, we got permission to publish the investment research and video as well!
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Now this is a platform at its best. This will probably be oversubscribed 10x 
Edit: For the 37 million scenario, there’s a 20% downside. Conversely, for the normal scenario, there’s a 45% upside. For the bull scenario, there’s a 230% upside. Everyone can draw their own conclusions.
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Yeah, I guess I’ll have to add a little to my portfolio, it really seems that good… Is anyone else taking some?
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Is there some technical reason/rule why Taaleri’s own funds, such as Mikro Markka, are not anchor investors?
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This is a good question!
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I have a question regarding the company presentation, but I couldn’t find the right place to ask it right now. Could Yurtsi or someone try to get this question asked:
When aiming for growth, the usability of the platform is important, especially as competition intensifies.
As a lender/investor, the slowness of the site (watching the spinning gears) is frustrating.
Will there be an improvement on this? Or could it get even slower as users increase?
As an example, Mintos works very smoothly compared to Fellow Finance’s website.
The question was drafted in a hurry. Feel free to edit it if necessary 
Thanks if it works out!
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You can submit questions here in advance or during the live event. There’s a question function behind the webcast link below:
I can submit your question there for you already
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What mainly concerns me is the reaction of major players in the financial sector. For example, international or large European banks and financial institutions would not, one would think, have a large investment in integrating peer-to-peer loans into their own service offerings. These players no longer need to invest in internationalization or brand recognition. The banking sector’s tightening regulation in recent years, increased capital requirements, and reduced margins on the lending side may attract these players to expand into peer-to-peer loans as well. Existing platforms can certainly be adapted for this use with small investments.
Another major concern is the lack of regulation in this “young” market. Political decisions can bring significant risks here.
The industry is indeed interesting, and the market is certainly growing.
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Question (general) and feedback.
I looked through the cash flow, and I can’t get the figures reported by the company, Inderes, or Evli to match. Everyone has different numbers. Can someone clarify what causes the differences?
And feedback to Inderes: in an otherwise commendable analysis, the cash flow is only for 2017. It would be nice to see what the cash flow has been in previous years. Evli shows all the company’s historical and future figures on one page in their report. (p.28/33)
When the ECB lowered its interest rate, I checked out Fellow Finance’s service. It seemed interesting, and I see a big role for services like this in the future. However, I also came across this blog post, which detailed problems with the platform’s account transactions and reports… and apparently, they were handled poorly. It makes me wonder if everything there works as it should – because, as I understand it, the platform’s functionality is the foundation of the entire business. And above all, how they react to potential problems. Fellow Finance ei herätä luottamusta
Hey, FF would have already grabbed 80% of the Finnish market if that platform wasn’t actually working. There are always individual dissenting voices.
I’m replying to my own comment because I found the answer to that valid login concern on FF’s website: Tiedotteet | Alisa Pankki
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Did I understand correctly that in an oversubscription situation, those who have invested in FF’s peer-to-peer loans get priority when shares are distributed? Or is simply logging into the service enough? So, if I decide to participate in the offering, should I first invest a little in peer-to-peer loans?
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They try to guarantee 500 shares for their investor clients, and 75 for others, if I remember correctly, so there’s an allocation advantage in an oversubscription situation. I don’t know if you need to have already invested in loans, or if just being logged into the service is enough.
So, registering before the subscription period ends is enough.
Edit: Fellow (Fellow) is smart, because I registered for the aforementioned reason, but at the same time, my underlying interest in investing in FF (Fellow Finance) was awakened. I intend to take it alongside stock saving.
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There weren’t any tricky questions in yesterday’s set.
Can Inderes still find out how the loans in Poland have ended up in collection with such a high percentage, and how they plan to make them profitable in the future? How will new areas be made profitable immediately in the future, so that investors don’t have to wade through a huge amount of losses from these new countries, because now Finnish loans are the only viable option there and that market is already almost captured.
How will global conquest succeed if investors from countries other than Finland have to take losses as heavily as, for example, from Poland?
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As an outsider, but still somewhat familiar with the matter, a comment:
The number of credit losses is naturally affected by the available information and the application of that information. It is likely that there has not been as much information available on Polish customers, nor has it been applied as well as is the case in Finland.
There are two solutions to this:
- Acquire a smaller player in the target market that has already accumulated its own data and market cultural expertise.
- Start with a small volume to gain experience and collect data. Scale up once things are working. Lainaamo can help with this.
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Yep, that’s what I thought too, but it still doesn’t seem to be working exceptionally well in Poland, looking at the statistics, and they’ve been practicing for 2 years now.
The statistics are also distorted by the fact that some people take out the loan for only a week or a month, even if the loan term is 2 years, and then pay it back. Add to this that every fourth person defaults, and it’s not a very good business for investors.
Yeah, good to know if that’s the case. I don’t have direct experience myself, but I’m considering investing in this, and at the same time, the thought arose whether I should also try out loan investing first.
The 2017 cash flow shown in the DCF (Discounted Cash Flow) cash flow statement differs from Fellow Finance’s own cash flow statement for a few reasons. The first reason is that the DCF calculation calculates the “theoretical” cash flow generated by the company’s business operations, adjusted for the company’s capital structure. For example, financial expenses are tax-deductible, but in the DCF calculation, the “tax benefit” from this deduction of financial expenses is adjusted in our cash flow statement on the line “taxes on financial expenses.”
The second reason is partly due to technical issues with our Excel model. For example, we have included the short-term “other liabilities” found in FF’s balance sheet under short-term interest-bearing liabilities. A portion of this item is likely also interest-free debt, which causes a small discrepancy in the change in working capital shown in the cash flow statement. In addition, the change in working capital is affected by the fact that the change in short-term loan receivables appears in our model under the change in working capital, whereas in FF’s cash flow statement, the growth in short-term loan receivables appears in the cash flow from investments. The change in long-term loan receivables appears in both our and FF’s cash flow statements under cash flow from investments.
Another question concerned operations in Poland. I also sent the question to FF’s CEO; let’s see if we get a more detailed answer later. My own thoughts on Poland are that it is a country with high credit losses, but at the same time, the interest rates required for loans are high, compensating for this risk. If you look at the current situation, for 2-3 star loans, the current interest rate level offers a good return/risk ratio in light of the statistics, but I would not invest in 4-star loans based on these statistics, as historically realized credit losses are clearly above the current interest rate level. Below is a figure of the current situation in Poland.
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