Welcome to the second of our Innovators series, dedicated to the businesses and founders changing the shape of the financial landscape with bold-thinking and revolutionary concepts.

Goji is a direct lending company based in London, offering retail investors access to innovative, alternative investment opportunities. We wanted to get inside the mind of the people behind the company to see how they are changing the game and working with Starling Banking Services to do more for their customers.

Direct lending, also known as private debt, has surged over the past few years, driven by investor demand.

Direct lending is where non-bank lenders provide debt facilities to companies directly, with no middleman, such as a traditional bank. As tougher regulations have changed the post financial crisis landscape, banks have become more cautious and have cut back on some types of lending. That’s created an opportunity for a growing and innovative group of new lenders who are offering loans to these underserved markets.

Back in 2015, a group of financial and technology experts spotted the potential for direct lending: Jake Wombwell-Povey (see Get to know, below) and Chief Financial Officer Alex Crocombe co-founded Goji and recruited IG Group’s David Genn.

“I was a chartered accountant doing M&A deals in the Financial Services sector,” says Wombwell-Povey. “We were getting an increasing number of alternative investment managers approaching us; many of them were good at asset management and selling to the customer but they didn’t have the technology.”

Best-in-class tech for the direct lending market

This technology is what Goji now provides to 30 different asset management companies.

Initially, Goji also offered its own diversified P2P lending bond but the founders soon realised there was more potential from focusing on the company’s best-in-class technology and made a pivot in early 2019.

Goji’s proprietary technology allows asset managers to integrate services into their existing platform stack using APIs or to use its white label web platform to give a full end-to-end capability.

This modular technology allows investment managers and credit originators to offer retail-suitable direct lending investments through tax-efficient wrappers such as the increasingly popular Innovative Finance ISA as well as longer established SIPPs and SSASs.

Behind the scenes, Goji’s platform runs on Amazon’s cloud infrastructure.

“This allows us to create a best in class architecture that is secure and resilient,” says Wombwell-Povey.

“We are trying to solve the ubiquitous problems across the asset management industry. We believe asset managers should focus on what makes their fund unique, the investments they make or the way they make those investments. What is not different is how they deal with regulatory matters, reporting to HMRC and so on.”

These common aspects are outsourced to Goji.

“We deliver these services in a digitally astute way for customers who don’t want to do it themselves and consider ourselves as a platform as a service.”

Right place, right time

Wombwell-Povey says the time has been right for Goji because of changes in the wider investment sector.

“In 2010 the market would have been too small. People have been getting disillusioned with traditional investments and we are seeing alternative investments popping up. New payment terms have also helped transform the way people invest.”

Goji relies heavily on word of mouth to expand its share of the market.

“The best way we promote our name is through great customer service. A lot of lawyers and regulatory consultants refer their clients to us. It is a relatively small industry and people talk a lot.”

Innovations in the market will also help grow the market for Goji’s services.

He says, “We are excited about digital distribution coming into this space. We have seen a lot of that in banking but not in the alternative investment space; if you want to invest in property or renewable energy, it is still difficult to do that.”

Working with Starling Bank

Goji partnered with Starling Bank in late 2018 to provide Goji’s clients with an FCA-compliant solution for protecting client assets and money (CASS) run over Starling Bank’s faster payments rails.

The partnership, a first for Starling in the investment management space, means Goji’s platform clients can take advantage of a best in class, fully outsourced CASS solution, delivered over faster payments. It means Goji’s clients can offer their investors a seamless, but CASS compliant, payments solution.

“We use Starling’s banking as a service capability,” says Wombwell-Povey. “We need to hold investors’ monies at a bank. Traditional banks make you hold those monies in a very manual account. With Starling Bank, we operate over their API. As soon as a client wants to create an account, we automatically create one with Starling’s banking infrastructure. Because Starling gives us access to the faster payments network, all the transactions are updated in real-time. Gone are the days of money popping up 24 hours later. Clients and asset managers know where their money is. That helps engender trust.”

“Starling Bank support us both in the relationship and also in the technical provision, making sure their platform does everything it needs to at all times. We are both relatively young businesses working and growing together.”

Learn more about Starling Banking Services.

Get to know: Jake Wombwell-Povey, Co-founder, Goji

Career: Jake Wombwell-Povey studied management and international business economics at the University of Manchester before starting his career with professional services firm Grant Thornton. At Grant Thornton, he was a strategic adviser specialising in the midmarket financial services sector and specifically P2P lending and wealth management. While there, he advised on the sale of GoCompare.com to eSure.

Advice: Jake says, “Just focus on making sure you are famous for one thing and doing that one thing exceptionally well.”

Interests: Jake says, “My interests include running (often with the pooch in tow), travelling to far-flung places, reading and architecture.”

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