The investor marketplace: 2018 and beyond

Around the end of 2016, shortly after we launched Growth Street’s investor marketplace, I wrote a three part series describing how it works. This has subsequently become a resource for anyone new to Growth Street who wants to understand our model.

However, around 18 months on, we’ve made some adjustments to our investor marketplace based on feedback from customers. We’ve put these changes into place with the intention of creating a simpler and better experience for everyone.

Single platform rate

At first, we offered investors a choice of two rates: Market Rate and Priority Rate. By choosing the Priority Rate, in return for a slightly lower interest rate, you could be matched ahead of Market Rate orders. We thought this would create a good balance on our marketplace; however in practice, nearly everyone chose the Priority Rate. Because Market Rate was set according to the previous 30 days’ average loan rate, the platform’s Market Rate quickly went down. Many investors told us they didn’t feel confident they knew the rate at which their money would be matched from month to month.

To address this, in late 2017 we removed the Priority Rate from our platform. We now offer one rate to our investors, which is set by Growth Street. At the time of writing, the rate is 5.3%. (We will notify all investors well in advance of any future changes to the rate.)

Standby investors

Businesses borrowing through Growth Street have access to GrowthLine, our flagship business finance product. Under normal circumstances, borrowers enjoy the freedom to draw down funds and make repayments as often as they like in a given month. What this means for investors is that sometimes, they might have to wait for their money to be matched, and on occasion their money will be repaid early. We had received feedback from investors that this setup required more oversight of their investments than they had expected.

Demand for Growth Street’s flagship finance product, GrowthLine, continues to increase. To ensure we always have funds available to meet the demands of our borrowers while giving our investors predictable and stable rates, we’ve made arrangements with some of our founding investors and commercial partners to keep funds on standby. This means that their funds will sit at the back of the matching queue, only being used once our ‘standard’ investors are 100% deployed.

Since making this change, we’ve consistently had at least 95% of standard investor money matched. This means that although we don’t anticipate regularly relying on standby investors, it gives us confidence that we’ll be able to continue to provide a great service to borrowers and investors.

We’ve added a new page on our website which displays important information relating to the investor experience: this includes the percentage of investor funds currently matched with borrowers, the amount of money waiting to be matched, and the estimated time for new money to be matched.

With these changes, we hope all our investors have more clarity and transparency as to how their money is being put to use. Moving forward, we’ll continue to take on your feedback and try to ensure that investors and borrowers alike have a great experience with Growth Street. If you’d like to share your thoughts or comments, just send us an email at feedback@growthstreet.co.uk. Keep your eyes peeled for more improvements later in 2018, and beyond!

Growth Street Exchange Limited is authorised and regulated by the Financial Conduct Authority (FRN 739318). Growth Street Exchange Limited is registered in England & Wales (company number 09495712) and our registered office is 5 Young Street, London W8 5EH.

Written on in Product
Head of Product