Successful fundraise as P2P aggregator Orca targets launch of Innovative Finance ISA
Peer to peer (P2P) investment aggregator Orca has secured £574,280 in equity funding to help deliver its ambitious development plans in 2019, targeting the launch of a multi-platform IFSA early next year.
Initially serving retail investors with data-driven research and analyses, in 2018 the company launched the Orca Investment Platform, enabling investors to diversify funds across multiple P2P providers from a single pre-built portfolio. In 2019, it plans to roll-out its flagship ISA, introduce a Self-Select portfolio builder product and extend its range of integrated lenders
Over 400 investors committed to the Edinburgh and Belfast-based fintech’s equity fundraiser on crowdfunder Seedrs; it also secured funding from a number of venture capitalist funds and private angel investors including TechstartNI, Clarendon Fund Managers and ESM Investments, a Scottish angel investment network comprised of 80+ high-net-worth individuals investing in early-growth-stage technology businesses.
‘The Orca ISA will be the first multi-platform ISA of its kind’
In announcing its successful raise, Orca’s CEO, Iain Niblock, said:
‘We’re delighted with the success of our recent funding round, particularly the response from the crowd who really got behind us. 2019 will be a landmark year for Orca as we roll-out new products to fulfil the needs of investors. The Orca ISA will be the first multi-platform ISA of its kind, combined with the launch of our Self-Select portfolio builder, we are confident that Orca can develop into the go to platform for peer to peer investing.’
Tax-efficient investing is the way forwards
Launched in April 2016, the Innovative Finance ISA (IFISA) was a hallmark moment for the growing peer to peer lending industry, elevating the P2P industry and supporting the notion that it was emerging into a mainstream asset class.
Initially hampered by the regulatory process, the number of IFISAs opened grew 520% from 2016/17 to 2017/18; 31,000 were opened in 2017-18, demonstrating the growing popularity of the wrapper.
Tax-efficient investing is a common trend in the P2P sector, with more experienced investors transferring poorly performing Cash ISA money into an IFISA to combat the erosive effects of inflation on their savings.
The Orca ISA will be a first of its kind in the market; current ISA rules allow people to divide their tax-year ISA allowance of £20,000 between ISAs (e.g, Cash, Stocks & Shares and Innovative Finance ISA) accounts however they wish, but, they may only subscribe current tax-year subscriptions to a single IFISA each year.
This makes it difficult to build a diversified P2P ISA-wrapped portfolio and investors typically hold one P2P investment within an IFISA, with others held in taxable general investment accounts.
However, the Orca ISA allows investors to hold multiple P2P providers in a single IFISA; here are the key benefits:
- Invest in the Orca Model portfolio suitable for hands-off investors or Orca’s Self-Select portfolio for the more active investor
- Earn interest up to 6.5%
- Earn returns tax-free
- Diversify ISA money across multiple P2P providers
- Transfer old ISA money
- Invest ISA money at non-ISA P2P providers
The company is already building a Waiting List of investors eagerly awaiting the launch of the ISA.
Self-Select portfolio builder
In addition to the Orca ISA, the company is also launching a new product to complement its existing model portfolio product.
The Self-Select portfolio builder allows investors to implement their own strategies, selecting only the P2P providers and products they wish to hold; once built the portfolio can be held in an Orca ISA.
Orca currently integrates with 5 major P2P lenders, namely, Assetz Capital, Landbay, Lending Works, Octopus Choice and LendingCrowd; a range of new lenders are expected to integrate in 2019.