The Monthly Alternative Investment Report: December 2022
What happened last month in the alternative investment markets? Which platforms are on the rise, and which ones are falling behind? How has the sector performed over the last year? We look at numbers reported to P2PMarketData in December 2022 and dive deeper into this month’s focus: 2022 in review.
About the monthly report
In the monthly report, we publish the funding amounts of online alternative investment platforms. We track data from 35 participating platforms, operating in 15 markets and 4 different currencies. Please note that:
- We convert all amounts to EUR for comparison reasons, using exchange rates from the last day of the month.
- None of the numbers cited is an estimation – the amounts are reported directly to us or pulled from the platforms' publicly available loan books and statistic pages.
- Historical funding volumes reported below may divert slightly from volumes calculated in previous reports due to exchange rate fluctuations and the changes in the pool of platforms we track.
You can check out the whole dataset at p2pmarketdata.com, and explore alternative investment opportunities in the Investment Search Tool.
Key highlights: What happened last month in alternative investing?
After a period of growth, the market slowed down this month. We recorded a total funding volume of €329m in December 2022 – a decrease of 2% compared to November 2022 (down from €336m). The total monthly funding volume in December 2022 was lower by €135m compared to the same time in 2021.
Looking at funding across the main investment categories, most funding in December 2022 went to platforms offering consumer investments (€186m), followed by business (€83m), and property investments (€59m). Consumer lending and property lending decreased by 2%, and 6% respectively, while business lending recorded no change compared to November 2022.
Platforms’ performance: How did the key players do in December 2022?
Opyn funded the most loans in December 2022, but only just slightly more than Mintos followed by PeerBerry. Overall, the five largest platforms accounted for 73% of the total funding volume recorded in our database, while the ten largest platforms funded 88% of the total volume. The largest players were most likely to be resale marketplace lending platforms (6 out of 10) come from Croatia (2 out of 10) and offer consumer investments (6 out of 10).
AxiaFunder – an equity crowdfunding platform from United Kingdom, offering other investments, has been the fastest growing platform in the last year, followed by Esketit and Income Marketplace. The “rising stars” were most likely to be direct marketplace lending platforms (7 out of 10), come from Estonia (3 out of 10), and offer property investments (4 out of 10).
Bulkestate, Debitum, and LandlordInvest have performed the worst compared to the previous year. Overall, the declining or slow-growing platforms were most likely to be direct marketplace lending platforms (7 out of 10), come from Latvia (2 out of 10), and offer property investments (5 out of 10).
Deep dive: 2022 in review
In 2021 came the biggest stress test for the alternative lending sector – the Covid-induced crisis that caused investors to suspend much of their activity. Just when we thought the sector had passed the test and we would go ‘back to normal’, 2022 hit unmercifully. The invasion of Ukraine, high inflation and rising interest rates, and regulatory changes – it was a year full of challenges for the P2P lending sector. How did the market perform amidst such turmoil?
Short answer – not too bad. Overall, platforms that report their monthly funding volumes to P2PMarketData funded slightly less than in 2021 (approx. -12%). However, this can only be read as a slowdown and not a sign of serious crises or lost investor trust. No major platforms ran into significant distress, and even those that hit some bumps on the way stayed well-afoot in the game. For example, even though PeerBerry had to fold on its buyback obligation on Ukrainian and Russian loans, it quickly came up with a mitigation strategy and remained in the top three platforms with the highest monthly volume of new loans.
However, we also saw some interesting market shifts. First, the decline only happened in the consumer lending segment (-25%). At the same time, property funding remained constant, while business lending almost doubled compared to 2021 (+76%)! It may show an acceleration of a trend we’ve been mentioning for quite some time that business lending might be the future of P2P finance.
Second, direct marketplace lending proved more shock-proof, gaining funding volume compared to 2021 (+35%). Resale lending, however, recorded a decline (-26%) – not least because the war in Ukraine disproportionately impacted resale lending platforms.
Overall, the 2022 trends are hardly surprising and reaffirm many conclusions we drew from the Covid crisis. In times of increased uncertainty and stress, investors tend to prefer direct lending platforms in the business or real estate sectors, with relatively lower interest rates and little international exposure. As our platform database and investment inventory grow, it’ll be interesting to compare the experience of other alternative investment platforms with insights from the peer-to-peer lending market. Stay tuned for the 2022 State of the Market report!