P2P Lending News » Virgin Money

Virgin Money Letting US Business Fade Away

P2P Lending News — Thu, 12 Nov 2009 05:37:02 +0000

The spartan home page on Virgin Money’s web site reads: “Everyone’s better off with simplicity in a complex world”. This is apparently the strategy Virgin Money is pursuing with their American business, as they seem to have dropped their loan servicing, student loan, direct mortgage, and mortgage licensing products from the site entirely.

The only option left for users is Virgin’s most basic social lending product, Handshake Basic, where for the low low price of $99 Virgin Money will pump out a templated promissory note for you and your kindly friend/lender (never mind that promissory note templates are readily available for free online). No longer available is the Handshake Plus product, where Virgin would at least collect payments on the lender’s behalf, avoiding those awkward “hey, could you, uh, pay me back?” moments.

This is the sad winding down of yet another of Richard Branson’s grand visions. From the acquisition of CircleLending in May 2007 and the opulent, history-bending (a British guy preaching revolution in Boston?) launch in Boston’s Copley Square in October 2007 (see video), it’s taken about two years for the Virgin Money empire to collapse in the United States.

The first clue that something was awry at Virgin Money was the awkward resignation of CircleLending’s founder Asheesh Advani. Our post on Advani’s resignation has drawn a lot of comments, including accusations of sexism, racism, and general incompetence. Either Advani’s ouster was an attempt to reinvigorate the company, or just another step towards the grave. In either case, later comments alleged a few more details about the demise of the company:

The company was no longer offering retail mortgages or reselling its mortgage license. The general manager of the mortgage business had bought Virgin Money’s licenses and started ClearPoint Funding. (ClearPoint’s state licenses page lists Virgin Money’s same licenses in fewer states, but the same pithy headline: “Drivers, dogs, yes, even we need licenses too. Here they are.”)
Virgin Money has eliminated loan servicing, and transferred loan servicing for previously-issued loans to a third party loan servicer.
Virgin Money recently laid off 80% of their staff and removed the sign from their “posh” office space (although the view from Google Maps is very mid-80s office park).

All but the last point can be verified, but from the, uh, simplicity of the Virgin Money US site, it’s pretty clear that the friend-to-friend lending experiment that started back in 2001 is coming to a close.

Note to the webmaster at Lending Club: It’s probably time to take Virgin Money’s mortgage products off the Uncrunch America web site that’s languishing on your domain.

Photo credit: Richard Branson in Fortune Small Business

Asheesh Advani Steps Out of Virgin Money – Or Was He Pushed Out?

P2P Lending News — Fri, 10 Jul 2009 16:56:36 +0000

Before Richard Branson decided that P2P loans were the cola of the new millennium, Asheesh Advani was an entrepreneur who wanted to make it easier for people to borrow money from their friends and family. After a stint at the World Bank, he wondered if he could improve direct lending between individuals, and launched CircleLending in 2001. Just six years later in 2007, CircleLending was purchased by the Virgin Group and named Virgin Money; Richard Branson wore a t-shirt that said “Go Fund Yourself” to the launch party in Boston.

Now it may be Advani who is funding himself (or getting, uh, funded), as his title shows a demotion from “CEO and Founder” to simply “President” in recent articles. He’s been completely removed from Virgin Money’s management page, and no replacement CEO has been added. Advani’s LinkedIn profile shows him as “President and CEO”, but self-managed LinkedIn profiles may not be the most reliable source of information.

So what’s going on over at Virgin Money? Of the original management team at Virgin Money (Oct 2007), only Dan Narahara remains (upgraded from VP of Technology to CTO). Has the pre-acquisition management team retired to a beach in the tropics, or has there been a conflict of strategy (or just a conflict?) at the friends and family lending site? A spokesman for Virgin Money offered the following statement:

Asheesh Advani has moved on to other opportunities outside of the Virgin Group having concluded that his skills and knowledge are best deployed in a start-up. We will be recruiting a new CEO to lead Virgin Money USA in its next phase of growth.

We wish Advani the best of luck in whatever’s next, and look forward to seeing what Virgin Money does with their next chief executive.

Photo credits: Richard Branson in Fortune Small Business, Asheesh Advani in The New York Times

Virgin USA acquires CircleLending, enters US banking market

P2P Lending News — Fri, 18 May 2007 04:49:47 +0000

CircleLending, the Massachusets-based facilitator of P2P loans, announced on May 15 that Virgin USA, the North American investment arm of Virgin (the UK-based Richard Branson company) had acquired a majority stake. Terms of the transaction were not disclosed.

CircleLending hasn’t been included in the discussion here in the past because, although they do facilitate loans between people, they only facilitate loans between people who already know each other… how droll. In August 2006, they raised a $10 million B round of venture capital from Venrock Associates, Intel Capital, and Omidyar network (who has also participated in funding Prosper).

This acquisition by Virgin can be seen two ways. First, it could just be an opportunity for Virgin, who runs Virgin Money in other countries, to get a foothold with an established (yet small and malleable) financial services firm in the US so that they can start offering their own products. Or second, it could be seen as validation of CircleLending’s model and Virgin’s desire to infuse some capital and marketing and make P2P lending a profitable business in the US.

I take a cynical view of this acquisition (i.e., option 1), and suspect that Virgin will keep the P2P loans bit as a side business, but otherwise just open a US version of Virgin Money. Virgin Money is described on the Virgin corporate site as “Awesome credit cards, no nonsense loans, switched on savings… and then some. Sweet.” We’ll see if that type of brand appeals to Americans, which I imagine will start in the Boston area, where CircleLending is based. They might want to change that “Sweet” to “Wicked pissa,” though.