Othera, a blockchain software company that digitises and automates loan origination and connects lenders with qualified investors for the sale of loans, has closed their Series A round after securing investment from Japanese financial services investor, SBI Holdings.

SBI Holdings are one of the leading investors in blockchain technology companies globally, and this investment strengthens their position as a dominant investor in the finance sector. In receiving this funding, Othera joins other high profile recipients of SBI capital such as Kraken, Ripple, R3 and Templum.

Established in 2015, Othera were among the first fintechs to leverage blockchain technology in their software and are one of few with an enterprise blockchain platform in the market. Lead by founder and CEO, John Pellew, Othera’s vision is to bring greater liquidity and transparency to loan origination and the capital markets sectors. This is achieved through their end-to-end loan lifecycle technology which begins with digital origination of loans and automation of underwriting, through to connection of originators with institutional investors for the faster and more profitable sale of whole loans and structured investment products.

Digital disruption of lending has begun rippling through the industry and an overhaul of the mounting inefficiencies is required if lenders are to continue to meet the growing demand for small business and residential loans. In the U.S., residential mortgage applications can be in excess of 700 pages and take an average of 4-6 weeks to close. Processing applications is labour intensive and there is over-reliance on third parties for data and verification; and the market fragmentation, disconnected systems, and paper based documentation also add to soaring closing costs that are eroding profit margins and threatening the viability of the lending industry.

Non-balance sheet lenders with credit facilities provided by warehouse lenders are especially feeling the squeeze. These lenders borrow funds from warehouse lenders during the application and closing process and must pay interest on the principal during this period. Given that it takes an average of 4-6 weeks to close a loan, the interest paid on loans add additional cost that eat into lenders’ already slim profit margins.

Othera’s loan origination system streamlines, digitises and automates the existing application and underwriting processes, thereby shortening the closing time and reducing costs; while their capital markets platform provides lenders with a faster and more profitable method for selling large volumes of loans to qualified institutional buyers. Together, these solutions deliver significant cost savings, capital relief and profitability for lenders.

Says John Pellew, CEO and founder of Othera,

“Our mission is to deliver superior efficiencies, trust and liquidity to the lending industry, where both the originator and the investor benefit from increased transparency of loan data; all of which is enabled through digitisation of loans on a private, permissioned blockchain.”

By digitising loans on the blockchain, Othera’s software creates an immutable record of relevant loan data and transactions, thereby capturing full asset provenance for the life of the loan. John Pellew has spoken extensively with lenders and investors and feels that Othera’s software will help lenders to write more quality loans, and strengthen the complex originator- investor relationship,

“By recording loan data, repayments and relevant transactions on a distributed ledger, and leveraging smart contracts and automation, we can ensure that originators and investors get back to doing more of the work that benefits the bottom line. This means writing more loans for less cost, and frictionless sales of loans to qualified investors; all underpinned by even more transparency and trust than that provided by the current structure”.

A strong partner in SBI Holdings

SBI have a strong reputation as a supportive investor in the financial services space, and John Pellew is optimistic about the new relationship,

“We are thrilled that SBI Holdings shares our vision for reimagining loan origination and capital markets using blockchain technology. They have a proven record in supporting emerging technologies, and are lead by a strong and experienced team. We are looking forward to working with them to roll this technology out into global markets.”

About SBI Holdings

The SBI Group was established in 1999 as a pioneer of Internet-based financial services in Japan. Since then, the SBI Group has formed the world’s first Internet-based financial conglomerate, providing financial services in a broad range of fields including securities, banking and insurance. In addition, the SBI Group provides Asset Management Business, with a prime focus on investment in venture companies – an activity undertaken since before the Group’s founding. In this sphere, the SBI Group has made focused investments in the IT and biotechnology sectors, which are the 21st century growth industries. Currently, the development of new technologies is accelerating within the FinTech, IoT, AI, Big Data and related fields, thus attracting global attention. The SBI Group is proactively investing in venture companies within these fields. For more information, visit https://www.sbigroup.co.jp/english.

About Othera

Othera is leading the way in the digitisation, issuance and trade of whole and partial loans. Application of Othera’s blockchain and smart contract technology reduces costs and risk for both lenders and investors by increasing asset transparency and liquidity, and digitising and automating manual processes and reducing inefficiencies. Othera’s re-imagination of loan origination and capital markets through their blockchain loan origination system, digital asset exchange and capital markets platform is delivering innovative solutions to meet the needs of lenders, and sophisticated and institutional investors.