What is Marketplace Lending?
Marketplace Lenders such as Lending Club and Prosper originate loans online, for purposes ranging from credit card refinancing to business loans, and sell them to investors.
Machine Learning & Big Data aimed at identifying top loans originated by online lenders
Combine data science and statistical discoveries with credit analysis and human insights to improve the quality of credit pricing decisions
Theorem targets strong, short-duration yields across the business cycle for investors
Marketplace Lenders such as Lending Club and Prosper originate loans online, for purposes ranging from credit card refinancing to business loans, and sell them to investors.
Traditional lenders are weighted down by obsolete technology and high regulatory costs.
Marketplace lenders directly connect borrowers with investors, cutting out expensive middlemen.
This enables borrowers to get loans faster, at lower interest rates, while still providing great yields for investors.
We harness billions of data points to build proprietary models for borrowers, loan originating platforms and products, and to map economic cycle conditions in ways not previously possible.
Theorem’s loan scoring technology analyzes 1,000+ data points to determine default probability and IRR for every loan
Industry-leading team of researchers and technologists combines data science and statistical discoveries with credit analysis and human insights with the goal of making more accurate credit pricing decisions.
Theorem applies its independent underwriting and pricing systems to monitor loan origination quality to identify investment opportunities and to quickly react to deterioration in platform underwriting practices
Bus drivers are 25% less likely to default than administrative assistants. Many bus drivers are unionized, reducing unemployment risk, which is a major cause of default. Turnover is typically higher among administrative assistants, increasing risk.
Wedding loans are 10% more likely to be repaid than business loans. Half of new businesses fail, wiping out the owner’s savings and cash flow. Marriage, even if a couple’s wedding is expensive, often creates financial stability. A married couple can fall back on one another in the case of adverse events such as unemployment or illness.
Theorem was formed in 2013 by co-founders Hugh Edmundson and Abeer Agrawal after incubating with Y Combinator and launched its first fund in 2014, followed by its second fund in 2017. Theorem currently manages more than $1 billion for endowments, foundations, sovereign wealth funds, pensions, healthcare organizations, insurance companies and family offices.