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With marketplace lending an increasingly competitive space, new entrants are finding niches where they can apply marketplace models without having to re-invent the wheel and go head-to-head with larger competitors who are rapidly becoming giants in their own right.
Companies such as Pave, who targets borrowers without credit histories, are identifying niche borrowing segments (whether customer segments or specific loan purposes such as wedding financing), with support from investors.
While overall venture funding into lending startups is slowing, some platforms still are raising money by taking aim at narrower or less-traditional borrowing niches than the first generation of financial-technology firms. Faced with a glut of online lenders and cooling interest from investors in some loans, a newer crop of fintech startups is focusing on areas including loans for real-estate projects, people with poor credit ratings, car buyers and, at the extreme, people getting married.
http://www.wsj.com/articles/new-fintech-lenders-narrow-their-scope-1461193681
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