RateSetter — Cyborg Score 5/10

Mixed
Peer-to-peer lending platforms

Strategic Profile

RateSetter's business model revolves around its Provision Fund, which mitigates risk for investors by covering potential borrower defaults, and the company makes money through origination fees from borrowers and a small fee from investors' returns. By the end of 2023, Metro Bank ceased using the RateSetter brand for savings accounts and new personal loans.

Cyborg Score Rationale

RateSetter operates in a mature P2P lending market with a strong brand history and significant loan origination history, but faces headwinds as its parent company Metro Bank has de-emphasized the RateSetter brand since late 2023. The platform's risk-mitigation Provision Fund and FCA regulation provide stability, but integration with parent company and market consolidation pose challenges.

Top Insights

  • RateSetter was acquired by Metro Bank in August 2020 at an acquisition price of £35 million, with an enterprise value of £35m conditional on meeting certain performance criteria.
  • Metro Bank ceased using the RateSetter brand for savings accounts and new personal loans towards the end of 2023.
  • RateSetter offers personal loans, property loans, dealer loans, and income shared agreement loans.
  • Over 750,000 customers have chosen RateSetter.

Named Competitors

  • Zopa — UK peer-to-peer lending platform
  • Lending Works — P2P lending platform for personal loans
  • Lendable — P2P lending marketplace
  • Prosper — US-based peer-to-peer lending platform

Recent Developments

  • (December 2023) Metro Bank ceased using the RateSetter brand for savings accounts and new personal loans
  • (September 2020) Metro Bank acquisition completed on 14 September 2020
  • (February 2021) Metro Bank bought out the P2P investors at par, valued at £384m

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