KOHO hands billing, servicing and reporting on new products to LoanPro

The 2.5 million figure is the loosest number in the announcement. Fintech.global writes that KOHO is expanding its offering to more than 2.5 million customers ^[4]. LoanPro's own announcement, as cpapracticeadvisor.com carried it ^[7], leaves the figure out. Rhett Roberts, LoanPro's CEO and co-founder, said only that KOHO "has earned the trust of millions of Canadians" ^[8]. Read together, the wording fits a base of more than 2.5 million that KOHO wants to sell new products to. Building a back end for customers KOHO has yet to win would be a different job. We think the first reading is the likelier one, though fintech.global does not say so outright.

If the base already exists, the case for LoanPro rests on launch speed. "We chose LoanPro for the flexibility to bring new products to market quickly and responsibly," said Rusen Baragiola, KOHO's chief product officer ^[9]. Fintech.global describes LoanPro's role as the lending infrastructure behind KOHO's upcoming products ^[6].

The deal is a build-or-buy decision on the back office, or rather on three parts of it: billing, servicing and reporting ^[1]. KOHO keeps the two parts its customers see, the products and the app ^[1]. LoanPro sells lending and credit management technology to financial institutions, lenders and fintechs, and its platform already covers origination, payment processing, servicing and collections ^[10]. The stated aim is to let KOHO introduce new offerings without having to build and maintain all the supporting infrastructure in-house ^[2]. In our view the engineering time freed goes to the app and to product design.

Québec is the sharper test. Roberts put LoanPro's job this way: "Our job is to give KOHO a modern, configurable platform so its team can move quickly on new products, including meeting the Canadian requirements that make this market distinct" ^[5]. Configuration is a promise until the first product with province-specific rules ships on it.

The counter-thesis is that a vendor's back end is a cost that grows with the customer count. The fee structure decides it: a per-account charge across a base above 2.5 million customers is a large annual line, and a flat charge is not. We would be wrong about the economics if KOHO later pulls servicing in-house, or if its first products launch no faster than a build would have managed.