InvestUP - The P2P Superstore

Diversification. That is the key to successful P2P lending but such a strategy, with funds spread across many platforms, can be extremely time consuming. The InvestUP Crowdfunding brokerage has been established to alleviate this problem by enabling investors to distribute their capital across many P2P hosts using just one account. Currently, offerings are listed from over 20 P2P sites in this online superstore of opportunities.

This is a great concept dreamt up by serial P2P investor, James Tuckett, who is InvestUP's co-founder and CEO. Unfortunately, repayments are held separately within each of the individual sites meaning it can take a while to build up a large enough sum to reach the minimum bid level and get the money earning on another loan – "cash drag" is the technical term. This is a problem I'm experiencing already having invested small amounts across a number of platforms.

Tuckett is well aware of this issue and has plans to eradicate the problem. In conjunction with his IT Team, led by fellow co-founder Chris Bradbury, processes are being developed to enable unallocated funds to be automatically withdrawn into investors' central InvestUP accounts so that they can be aggregated to form one biddable sum that can be allocated to any of the partner sites. This is likely to require additional regulatory permissions to be granted before it can be implemented.

The company are also in a dialogue with the platforms who list auctions on their site to lower minimum bid limits for InvestUP users so that funds can be re-invested more readily. As one of these is ThinCats, where the lowest part loan amount is £1,000, it would be quite a coup to bring that down to the smallest bid threshold in the InvestUP portfolio of partners (currently £10 at ReBuildingSociety) although the goal could be easier to reach if the new owners of ThinCats (see last week's blog) have the philosophy of opening up their platform to those who are less cash rich.

Under the leadership of Dom Wolf, head of Marketing and the third co-founder, it is certainly the case that there is a strong desire at InvestUP to meet the needs of the retail investor and they see a major opportunity next April when the government introduces the Innovative Finance ISA (IF ISA).

Discussions are still ongoing between those P2P platforms who wish to offer IF ISAs and the HMRC as to the exact nature of these new tax-proof wrappers however, should the rules stipulate that individuals can hold just one of these types of accounts per year, then InvestUP claim their crowdISA will be the only way to earn tax free income across multiple P2P sites.

There is enough in my FundingCircle account to fill up an annual ISA Allowance and I hope they will allow me to transfer those pre-invested funds rather than start again from scratch. Nonetheless, I also have an existing CashISA that is earning very little interest and I'd like to move that to an InvestUP crowdISA if the rules allow. With access to such a wide cross section of loans, this would seem to be the best way to diversify a lump sum in the P2P marketplace. I plan to register early in the New Year as the product will have a larger fee free allowance for those who sign up prior to April.

Being able to offer an IF ISA product was a key factor in InvestUp's business plan but before they could do so FCA Accreditation was required. Obtaining this took a great deal of time and effort but gained the company credibility along with providing the possibility to broaden their offerings in future to include debt and equity securities.

The current website is similar to other platforms with a series of loans on which users can click to get additional details and make bids although there are many more on offer than anywhere else – just under 60 on 17th December. A new version of the site is under development and InvestUP have extended an open invite for investors to visit their London offices to give it a try and provide feedback to ensure it meets their needs. One upcoming feature is a resource area where investors – regardless of experience – can compare deals and understand the risks.

It's fair to say that InvestUP is not yet where the founders want it to be having been establish as recently as Spring 2014 using equity raised via Crowdcube. James Tuckett says, "The platform is going through a protracted Beta testing phase at the moment." It is clear however that the welfare of P2P retail investors is at the core of their ethos and, if the stated aims are realised, they will make it much easier for the general public to operate in this field.