LendingClub Soars in Public Debut

By Katie Roof Features FOXBusiness

Lending Club CEO talks IPO debut

Lending Club CEO Renaud Laplanche on the company and its IPO debut.

LendingClub (LC), the San Francisco-based peer-to-peer lending service, saw its shares rise as much as 67% in its trading debut Thursday. The company raised $870 million in its IPO, after pricing shares at $15, above the expected range of $12 to $14.

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The IPO is an “opportunity for us to say thank you to our customers,” CEO Renaud Laplanche tells FOX Business. It “gives us a larger capital base which enables us to see growth opportunities differently.”

The lending marketplace is expanding and the LendingClub IPO comes just six days before another lending startup goes public, OnDeck.  But unlike some of its competitors, Lending Club does not provide the loans, but instead offers a platform for peers to connect. The company does not have “balance sheet risk,” says Rebecca Lynn, who invested in LendingClub through Morgenthaler Ventures.

Lynn says that Lending Club, which was founded in 2007, benefited from entering the market during the financial crisis. “A lot of people couldn’t get loans,” so LendingClub filled a void in the marketplace.  Echoing the sentiment, Upstart CEO Dave Girouard says it became “very very hard for small businesses to get loans so these companies have stepped in and responded.”

Morgenthaler Ventures owned 9.2% of LendingClub shares before the offering and will reduce its stake to 7.9%. Other top shareholders include Norwest Venture Partners with 16.3%, Canaan with 15.7% and Foundation Capital with 12.7%. CEO Renaud Laplanche had a 4.7% stake pre-IPO.

LendingClub reported a net loss of $23.9 million for the nine months ending September 30th, down from a profit of $4.4 million the previous year, as costs rose. Revenue for the time period more than doubled to $143 million.

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With a growing sea of competitors, AmeriMerchant CEO David Goldin says the “industry is going to have a lot of consolidation,” predicting that we will see mergers in the lending space.