In the past few years, the so-called P2P lending industry has certainly experienced tremendous growth, with origination volume doubling annually, reaching $24 billion globally in 2014.

P2P lending startups also have attracted an enormous amount of attention from venture capitalists: According to Dow Jones VentureSource, U.S. lending startups raised $2.4 billion in the first three quarters of 2015 alone.

While the earliest lending platforms began with truePeer-to-peermodels, the majority of lending capital is now provided by institutional investors, such as hedge funds, insurance companies and, yes, even banks.

As the capital supply is now more concentrated with institutional investors, the two-sidedNetwork effectsboasted in the early years of P2P lending may not be as important today.

New lending platforms actually employ two new business models: technology-enabled lending and 100 percent off-balance-sheet financing through aMarketplace“.

The point-of-sale opportunity is also specifically suited to marketplace lending in a way that refinancing is not; retailers need high approval rates, which the marketplace lending model is uniquely suited to offer because of its ability to find investors for a broad range of borrower credit profiles.

Marketplace lending allows a single platform to make financing offers to wide variety of borrowers by operating a marketplace of credit investors with various risk/return preferences. This is critical for point-of-sale lending, where it’s important to have high approval rates to meet the needs of retailers.”