TrustBuddy AB is the only Peer-to-Peer (P2P) lender listed on the OMX: First North exchange. Headquartered in Stockholm, Sweden, the company has been providing short-term consumer loans of up to 10,000 SEK since 2011. TrustBuddy is active in 10 European countries through 3 different names:
1) TrustBuddy: Consumer ST Loans
2) Geldvoorelkaar (Netherlands): SME Loans up to 750,000 SEK; average loan is 48 months
3) Prestiamoci (Italy): Consumer LT Loans up to 250,000 SEK; average loan length: 34 months
Quality of Earnings
Quality of Management
TrustBuddy – Revenue growth is expected to remain between 40-60 %
Leadership Instability as CFO Linus Lönnroth is acting as interim CEO. We believe that a company in such early stages requires defined leadership presence, which the company falls short on here.
Lack of confidence among CLO, who sold 20% of his shares in Q2 2014. We believe this might be due to insight about regulations impacting the lender/borrower relationship in P2P lending.
Volatile multiples largely due to the nature of being a new company, and also a number of “one-time” events. Accounting reporting methodology was changed in 2012, which skews numbers during that year.
New acquisitions of companies in Italy and the Netherlands create opportunity to capitalize on P2P Lending industry by improving product and geographic diversity.
Strong Revenue growth has still resulted in low or negative profit margins among TrustBuddy and peers.