The start-up has just filed its IPO document, to raise at least $500 million.
Lending Club will go public in 2014. The start-up launched in 2007 by Frenchman Renaud Laplanche has just filed its IPO document with the SEC, the American stock market regulator. The platform of loans between individuals, which would be valued around four billion dollars, according to observers, hopes to raise at least 500 million dollars during the operation. An amount that should certainly increase. The share price is not yet known.
In the first half of 2014, Lending Club posted a loss of $16.49 million, whereas it earned a net income of $1.74 million over the same period in 2013. The fault lies in particular with rising operational and administrative costs and, above all, increased marketing expenses (39.8 million in the first half of 2014, compared with 16.1 million the previous year). Investments that will not have been in vain: Lending Club has increased its turnover by 134.4% in one year. It went from 37.09 million in the first half of 2013 to 86.94 million in the same period this year. Lending Club has nearly $67 million in cash, the document informs. Since its inception, Lending Club has raised more than $392 million in 12 rounds of financing, including $65 million last April as well as a $50 million debt issuance… The amount raised at the IPO could be used to repay the debt.
Valuation of over four billion
According to the Wall Street Journal, Lending Club could seek a valuation of more than four billion dollars at the IPO. The shares of Renaud Laplanche, who holds 5.6% of the capital, could be worth more than 224 million dollars. The investment fund Norwest Venture Partners holds 16.5% of the shares, Canaan Partners 15.9%, Foundation Capital 12.8% and Morgenthaler Venture Partners 9.2%.
TheIPO document also reveals the remuneration of Lending Club’s executives. Renaud Laplanche, founder and CEO, received $518,208 in compensation in 2013, including bonus.
Five billion dollars in loans since 2007
Since its creation, Lending Club has seen more than five billion dollars of loans pass through its platform… Including $1 billion in the second quarter of 2014. It takes a commission ranging from 1% to 6% on each loan, and charges investors a management fee. The platform has recently started issuing loans for small businesses and plans to further diversify its business. In particular, it bought Springstone Financial, a company that lends money for medical procedures and to pay for private schools, for $140 million. Eventually, the company plans to expand outside the United States.
In the United States, several competitors have launched in the same niche and are also planning to go public soon. Last April, LendUp raised $50 million in debt to accelerate its expansion. Better Finance, OnDeck Capital, Think Finance, Prosper and Kabbage -which has indicated that it is considering an IPO for 2015- are also trying to make a place for themselves in the market for loans to individuals or companies, thus nibbling away at the business of traditional banks.