Beneficial network Liu Yannan: More than 1 billion users a year, "small victory" this refining into

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Last May, "The entrepreneur" once reported the model of the beneficial net, at that time, their site just on line soon, team size only 20 people, to the end of last year, the beneficial net won the soft silver China 10 million U.S. dollars in a round of financing, and a round of financing only half a year, the beneficial network ushered in the morning Hing capital of tens of millions of U.S. dollars of the B round financing Nowadays, the scale of the beneficial net team has expanded to more than 120 people, which is the fastest developing Peer-to-peer network credit platform.

From the establishment to the line, and then into the Peer-to-peer industry comprehensive rating of the top five, the beneficial net only spent more than a year, the achievements. It follows the P2N Light asset operation model, and small loan companies to carry out active cooperation for their own development has won a lot of chips. In the early years after the rapid growth, the favorable network began to usher in the industry reshuffle test, whether in the Peer-to-peer wave scouring the sand in a firm footing has yet to be the market for continuous testing. Today we come to hear how the founder of the Liu Yannan Net understands Peer-to-peer.

The following is Liu Yan Nan dictation:

B round of financing, feel more responsibility

A lot of people ask me, how to use after getting the B-round financing? I think the most important thing for an entrepreneur is how does it feel to get the money? To be honest, when you go to talk to these VC, it must be lest you can not put the favorable network to say a little more perfect, lest they feel that the beneficial net is a very promising enterprise , we also have a good network of the future to do a lot of industry analysis, the future of the company to do a lot of vision, now really get the money, so much amount of an investment, from the bottom of my heart more feel should be a responsibility.

Because I think the average age of our three founders is 27 years and a half, so now there is a world of such a well-known investment institutions, such a well-known investors, such a big bet on us, this is a recognition of us, but for us, this is more of a responsibility, which naturally brings a pressure, Under such pressure we how to do our own, how to bring our company to a new level is we want to think, only in this way can give our investors better account, so now more feel should be responsibility and a sense of mission.

Where are the best borrowers?

The initial benefit net is just a peer-to-peer platform, the money people come up to invest, borrowers come up to show the project, but the consultants suggested that such a side to do the flow, while looking for projects, not only slow growth, but compared with other Peer-to-peer platform, the advantages of the network characteristics is not obvious, more crucial is, to do a good job of peer-to-peer is not just open a website so simple, One end of the flow has to be transformed, the other end is particularly important to develop a reliable loan project. Not only to borrow money, but also to go. An advantageous network must find an entry point.

The internet is not necessarily a good way to find quality investment projects. The biggest difficulty in Peer-to-peer mode is the control of the borrower's risk. China's credit base is not as good as America's, and it's unrealistic to put everything online. Plus the region's span, if the other side does not repay, it is difficult to recover, the other side of the control is very poor.

In Shenzhen, I have been to a factory to do firecrackers, annual sales of about 1.5 million yuan, earning tens of thousands of yuan a month, stable income, its own funds can fully meet the normal operation, but at the end of the year, they may have the potential demand for borrowing. Because at the end of the year, the demand for firecrackers will explode for some time. At this point if the increase in production, the two or three months may be two hundred thousand or three hundred thousand Yuan income. This is the time to ask if the business needs to borrow money, their feedback is often, can borrow, do not borrow also can, because there is a part of their own funds, and then borrow some money can produce a little more, earn a little more, do not borrow words, but the increase in production less.

There are many examples such as this kind of talent is the quality of small micro-loan borrowers. On the contrary, the risk is too great for those who have a capital chain to borrow money. But I have visited a lot of small micro-enterprises found that this type of potential borrowing needs of small enterprises have a common feature is the need for passive development. They do not take the initiative to borrow, especially if they do not search the Internet to find out where to borrow money. So I think finding the right borrower has to do it online, but if it costs too much to go down the street on the offline sales team, it's not a future trend.

The cut-in point of the advantageous net is the channel

How to solve this contradiction? My previous work experience came in handy to find a small loan company. China's small micro-credit has great demand, but small microfinance companies can only meet a small fraction of those needs. Microfinance companies cannot absorb deposits because of State policy. This means that a bit of their registered capital plus the bank's matching money, when used up it will have no money to lend. This is a point of entry, since the small micro-loan companies do not finish the business, let them recommend to the good network. But the light recommendation is not good, but also to the borrower audit, and provide security and responsible for the back end of the collection. Microfinance companies used to lend their money to earn spreads. Now the borrower is sent, and the liability is secured to earn a service charge. This is also reasonable, because the small loan company does not have the money.

At the same time, the platform only provides information services, and in the microfinance companies to do credit management based on the borrower, the favorable network will also do a review of the borrowers again screening. But not involved in the trading process. The money is directly from the investor account to the borrower's account. In other words, the favorable network positioning is the network sales platform, is essentially the channel.

Each do what can be done, the model of the beneficial net is clear

At that time, the beneficial net was not yet online. In other words, no platform, no traffic, no users, no funds, empty an idea. But the first to find what kind of small loan companies to talk about cooperation, they set a high standard-the first cooperation of the small loan companies, must be the industry's most reputable, the largest. This is good to persuade investors to put money here, and the small loans behind the company to talk about.

I found a partner at the original work unit, TPG, and asked him to give me a referral. The other introduced him as a leading company for microfinance in China, which has a monthly loan amount of 200 million or 300 million.

I met the chairman of the company in October 2012. He was more than 60 years old and was chairman of Morgan Stanley's Asia-Pacific Private equity fund. To my delight, the other party asked the first question, how to know the friend who introduced us to meet. This problem has more or less narrowed the distance between us.

The other side asked me three questions: Do you have the ability to get so many users and traffic on the Internet? Is there any continuity in this model? When you work with more small lenders, what happens to one of the small lenders that will affect me? I answered them all, The planning schedule of the favorable network is also introduced.

The first meeting did not immediately reach a partnership, but laid a foundation. The other side thinks the model of the beneficial network is feasible, and both sides have a very consistent view of the industry. We met again in January 2013, before the website was online. Some of the plans I've been talking about have been completed. The cooperation between the two sides was finalized.

The cooperation of communication, in fact, to help me think about it, is a small loan company or external institutions how to see us, they care about what problems. Then the cooperation of the latter is more smooth. In the same way, after several big small lenders, the beneficial nets began to collaborate with small lenders of a slightly smaller size.

At present, this piece of business is Wu Yijan to be responsible for. He has a team that specializes in working with small lenders, doing due diligence and monitoring their assets. This business must be fixed on the line. To control the risk of the borrower, first of all to the cooperation of the small loan companies.

How to spend money to melt

As far as the current favorable network is concerned, there is much to be optimized for its Internet platform and the user experience on the mobile side. There are a lot of small details worthy of us to improve, so that users more fun to use, so that users more concise trading process, these are the direction we have been pursuing, the user experience to achieve the ultimate.

On the other hand, from the financial nature, financial products are a combination of several elements together, any financial products is the interest rate, the term, the amount of three elements of splicing together, for us to better meet the requirements of users, must be said to be able to find more in line with the user expectations of good financial opportunities, This is what we need to focus on in the next phase, we may be involved in more asset types, through more and better asset types, to meet the needs of users to get more of this security, stability, and higher financial benefits.

The reason why we have to finance this time, is naturally ready, that's where the money should be spent, in general or in two, the first part is to continue to surround and deepen our core competencies, risk control, and you may all know that risk control is so difficult in China because there is not enough data The amount of data accumulated is the size of your transaction costs, some of the money must be spent on how we continue to expand our deal size, and as the scale of the transaction expands, our ability to quantify the data is tempered, which improves our ability to do wind control models ourselves, Another part of the money will be spent on information infrastructure, after all, the beneficial network is now a service 1 million users of a website, we want to do, is naturally in the information, in all aspects of account security to be constantly strengthened.

Multi-channel wind control business model

Our current bad debt rate is about 0.7, the business model of the beneficial network is two wind control business model, the first way by our offline partners to complete, the second is in a favorable network completed. The first wind control requires our partners to bring together all the borrower information to us, to make sure that this borrower is real and that the authenticity of the second message can be verified, we have done a very detailed quantitative and qualitative due diligence on our cooperating agencies to ensure that once they have a problem with each loan, Have the ability to make a timely substitute for this loan, for our favorable network, how to exercise their own risk control ability, has always been our core competitiveness to measure the top priority, because this is two things, the first step to strengthen our measurement of the right to identify the appropriate partner opportunities, This is due diligence in the organization, on the other hand for the project itself, with the accumulation of data, our quantitative control risk model is constantly in the building and improvement process, this is definitely the next step in the focus of investment.

In addition to the Peer-to-peer information symmetry that we often discuss today, it should be said that the complete symmetry of the information is a relative conclusion, not an absolute one, and we will be as open as possible. All the information we believe will not affect the privacy of the borrower to our investors, to make them a more rational judge, this information includes many kinds, such as borrower identity information, your age, your qualifications, your marriage status, your child status, your job information, your property information and your credit information, These will be made publicly available to investors, who can fully understand what kind of people they are going to lend money to.

Core competencies no more than two points

I feel that the current core competitiveness of the network is no more than two points.

1th, the risk of the grasp and control capacity, which is closely related to our choice of model, because we chose a O2O full experience of the closed loop, the favorable network is the key to this closed loop indispensable. All the information, as well as the precipitation of a large number of information, for us to use this information to make a big data mining, to do quantitative risk control is of decisive significance, before in China, no one to use quantitative risk control, no one has the risk of quantitative core reason is that data, especially the accumulation of default data is not enough Because each organization to maintain its own profit margins, reduce their bad debt rate, if your bad debt rate is 1%, 100 of customers have one is bad, so it is difficult to accumulate bad customer data to the point where you can do quantitative analysis. And for the benefit of the network does not exist such a problem, even if each institution's bad debt rate is very low, in fact, with more institutions to work together, we can accumulate bad customer data to a quantitative analysis of a scale, which is very important to us.

The 2nd core competitiveness lies in the efficiency of our Internet platform. Whether at the end of the financing, or at the end of the funding, or in the receipt of each loan after the approval of the link, we have to maximize efficiency, such efficiency is a lot of traditional financial institutions, many other peers are no way to achieve.

Undervalued industry thresholds and apparent policy regulation

At present we in this industry also saw some of the phenomenon of running away, I think in any industry, especially in the early development of a mixed bag this situation is not surprising, whether in the electricity dealers or third-party payments, have seen this situation, at a certain stage of the outbreak.

The emergence of this situation, I think, is due to the excessive underestimation of the entry threshold of the industry, the entry threshold of this industry is actually quite high, I said on different occasions, in the investor this end, let the people have never met believe you, the money to get you this online investment is very difficult one thing, To do a lot of investor persuasion and educational work for borrowers, not only do you have to find enough people to borrow, but also have the ability to identify those who have the need to borrow money is not to be able to pay, is another very difficult work, to the two sides of the matter are good, very difficult to enter the threshold in fact very high.

From a technical perspective, for Peer-to-peer this industry, many people think that as long as you do a website can do business, so many people have come to this industry, after a period of time, found that they lack the ability to identify the borrower repayment ability, or the actual ability to coordinate various parties, resulting in overdue or bad debts and other phenomena occur , this time found that the industry threshold is very high, so that there may be extreme measures, so that the emergence of such a run is not surprising.

As far as regulation is concerned, our network has maintained continuous communication with the regulatory level, we have a lot of expectations of regulation, hope that through the introduction of regulation, we can better standardize the development of the industry, to help the industry's conscience enterprises, excellent enterprises bigger and stronger, hope that regulation can uphold the bottom of the regulation of such a principle, Not to stifle financial innovation at the same time, tell us what can be done, what not to do, the black sheep of these mixed mixed gradually eliminated, let the industry into a virtuous circle of the track.

I black Horse Reviews:

Banks are not always there, and whether they have been there for a long time, there has been a different debate. The Economist used the term "banking without banks" to describe transactions that took place on a peer-to-peer platform, at least in microfinance, where technology made it possible for market participants to skim the banks into reality, and those who had been dumped by the banks were on the internet and hooked up with investors. And unlike academics, peer-to-peer itself is not an important financial innovation, to discuss Peer-to-peer is not a new model, the market does not care, the market is concerned about whether it can solve the problem, so as a good network, millions of registered users and 1.8 billion of the turnover so that we are very sure to see this thing is needed by the market.