Lending Club Corp. has filed with the U.S. Securities and Exchange Commission (SEC) for an initial public offering (IPO). No terms were released for the filing, but it will be worth up to $500 million. The company has not chosen an index to list on, nor has it chosen a ticker symbol. This is a highly anticipated offering for many investors.
The underwriters for the offering are Morgan Stanley, Goldman Sachs, Citigroup, Allen & Company, Stifel, BMO, William Blair and Wells Fargo.
Lending Club is the world’s largest online marketplace connecting borrowers and investors, facilitating more than $5 billion in loans since it first launched in 2007. Its main competition is the traditional banking system, which the company claims to have a more efficient mechanism for capital allocation to borrowers and investors. Lending Club also lets consumers and small business owners to borrow through it to lower their cost of credit. Investors can earn attractive risk-adjusted returns from an asset class that had previously been closed to individual investors.
Compared to traditional banks, Lending Club is more technologically oriented with its online operations, reducing the need for a physical infrastructure and improving convenience. Also the automation in its marketplace increases efficiency by reducing manual processes and improves the client experience.
Since its launch in 2007, Lending Club has experienced significant growth. The company’s loan originations grew to $2.1 billion in 2013, an increase of 188% from $717.9 million in 2012. For the first half of 2014, loan originations were $1.8 billion, up 125% from $799.1 million in the same period a year ago. Revenues increased to $98.0 million in 2013 from $33.8 million in 2012, marking an increase of 190%. The first half of 2014 reported revenues of $86.9, up 134% from $37.1 million from the first half of 2013.
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