Goldman Sachs mulls P2P tie-up

Investment banks in early discussions with online invoice financing company Aztec Money.

Goldman Sachs and Société Générale are amongst several banks in talks to back online marketplace finance company Aztec Money, as first reported by the Financial Times.

Goldman Sachs is a long way from proceeding however, a source with knowledge of the situation told PDI.

Goldman Sachs and Aztec Money declined to comment on the article. Société Générale had not responded to a request for comment at time of publication.

News of the potential partnership reflects a growing trend of online peer-to-peer lenders teaming up with bigger financial institutions in an effort to boost their firepower. UK-based Funding Circle recently joined up with US hedge fund KLS Diversified in a deal to securitise its assets, as reported in December with analysis in the February issue of Private Debt Investor.

Dublin-headquartered trade receivables firm Aztec Money allows small and medium sized businesses to sell their invoices to institutional investors through an online auction platform. Businesses are charged a percentage of the invoice when it is successfully auctioned to institutional investors, who are seeking a discount for taking on the money owed by the debtor in question.

The transaction entails a straight sale of the asset, Colm Devine, vice president of business development at the firm, explained in a radio interview in 2013. At the time, Aztec’s platform focused on businesses in Ireland, Spain, Greece and Italy but had its sights set on Asia and Africa also, he said. The firm claimed it was seeking to make €2 billion in credit available to Irish businesses.

Aztec does not provide money to companies by way of a loan but via a straight forward sale of the asset, in this case an invoice. “If the company is owed €100,000 by a specific debtor, our institutional investors are looking to purchase that invoice in a straight sale and they’re obviously looking for a discount on that price so obviously they make their own margin,” Devine explained.

A spokeswoman for Aztec declined to comment on the FT article but told PDI that while the firm is continuing its business in Europe it is more focused on Latin America, Asia and Russia at present.