Yann Murciano, Founder and CEO of Blend Network is a man who likes challenges. As the Head of Metals Trading at Morgan Stanley for over a decade, he helped catapult the bank to the top spot in ranking of commodities banks. Now, as Founder and CEO of Blend Network, he is committed to help solve what has described by successive governments as the nation’s most urgent and complex challenge: the housing crisis.
Why did you start Blend Network?
I started working in the financial industry as an FX trader before moving to trading gold and copper, both much more inefficient markets than FX. I realised that the UK property market was a hugely inefficient market in the sense that lenders and borrowers are not meeting. On the one hand, you have very experienced property developers across the country who are trying to access funds to build homes but traditional lenders are no longer active in providing development finance.
On the other hand, you have people with cash who are getting near-zero return on their savings at the bank and who are desperately looking for a yield product to invest in. I recognised that there was a huge opportunity to build a platform that essentially connected those lenders and those borrowers in a highly efficient and transparent manner. And so Blend Network was born out of the realisation that there is a need for a marketplace between lenders and borrowers in the property space.
What are the main challenges that you have faced?
When investors first come to us and see our 8-12% return p.a., the first question they ask is ‘how are those high returns possible?’. So, I guess one challenge, although not a real challenge but more of a ‘good problem to have’, has been explaining to our investors how we have been able to achieve an average 11.10% return p.a. so far. But once we explain our strategy, which is lending to experienced property developers across the UK regions where there are not many lenders despite a healthy market, they fully understand. In fact so far, the money from lenders has been growing at a faster pace than the deals we have on the platform and our deals regularly get funded within minutes of being listed.
Furthermore, although no longer a start-up, we are still a young company that has to keep on building our lenders’ trust. Being FCA regulated and having a strong track-record like we have has certainly helped us and we want to continue on building up the business as we have until now by delivering great results to our lenders and a great service to our borrowers.
How have you overcome those challenges?
As explained, once we explain our strategy to our lenders they it makes perfect sense how we are able to deliver returns that are clearly at the top-end of the P2P lending space in the UK. We focus on lending across the UK regions where even experienced property developers are under-serviced. We tend to stay away from lending in large city centres such as London because it is a much more competitive space and because we believe the exit strategy at present is not ideal.
Instead, we lend in places such as Coventry, East Anglia, Doncaster, Northern Ireland. Northern Ireland is a very good example of our strategic approach to lending. Last year, we did around 80-85% of our business in Northern Ireland. At the time, people were rolling their eyes when we said we are lending to property developers in Northern Ireland, but it turned out that Northern Ireland was the strongest property market in the UK last year, yet there are very few lenders in Northern Ireland. This is how we are able to achieve a great risk/reward for our lenders.
What are the key strengths of Blend Network?
Obviously as mentioned lenders on Blend Network get returns that sit at the top-end of the risk/reward curve, with average returns so far at 11.10% p.a. But most importantly, we really focus on delivering a great customer experience for both lenders and borrowers. And I know this sounds simple, but we want every single customer to have the best experience when they either lend or borrow with Blend Network and face as smooth as possible journey.
We are a small team of highly experienced and approachable people sitting in an office in Mayfair. In a day and age when it is almost impossible to call a company and speak to a decision-maker directly, we pride ourselves of exactly doing that. We have always said that while we are not necessarily focusing on being the largest P2P platform in the market, we do want to be the best in terms of loan quality and customer service. So far, we have done just that.
What do you think are the qualities of a successful business leader?
I believe a successful business leader needs to have a vision and be able to articulate it. He needs to lead by example and have a contagious energy that transmits to all team members.