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Harmoney widens losses

NZ NewswireNZ Newswire 26/07/2016

New Zealand's biggest peer-to-peer lender Harmoney has generated $8.6 million of revenue in its first full year of operation, but also widened its annual loss.

It reported a loss of $14.2 million in the 12 months ended March 31, compared to a loss of $6.3m in seven months through March 31, 2015, its financial statements show.

Since the P2P platform was launched two years ago, it has generated $10.5m of revenue for brokering $275m of lending to 15,000 borrowers through its portal.

The company's operations burned through $13m of cash in the year, and it raised almost as much through share issues, which left it with $8m in cash and equivalents.

"Developing our lending platform requires a significant amount of upfront investment in both technology and people," chief financial officer Simon Ward said.

"In the past year our business has grown to more than 80 staff and we are investing heavily in marketing and compliance to ensure Kiwis know about Harmoney and understand what it offers."

Harmoney got a head-start as the first mover in the market but is facing increased competition from the arrival of other licensed P2P lenders Squirrel Money, LendMe, Lending Crowd and PledgeMe, which also operates a crowdfunding platform.

The bulk of Harmoney's revenue came from fees charged to arrange a loan between a borrower and lender, with $6.3m derived from broking fees in the year.

Harmoney's biggest expense was $8.1m on marketing, followed by $6.3m on employee costs and $2.1m on information technology expenses.

It also paid $318,000 to cornerstone shareholder Trade Me for marketing services in the form of shares.

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