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LendingClub's Shares Soar in Debut

Shares of LendingClub rose as much as 67 percent in their debut, valuing the company at more than $9 billion.


Shares of LendingClub, the world’s largest online marketplace that connects borrowers and investors, rose as much as 67 percent in their debut, valuing the company at more than $9 billion.

The company’s low-cost peer-to-peer online platform allows investors to lend directly to individuals and businesses, cutting out banks and other lenders.

Traditional banks have been hurt by the high underwriting and servicing costs related to small business lending, creating an opportunity for companies such as LendingClub.

San Francisco-based LendingClub has facilitated more than $6 billion in loans and paid about $596 million in interest to investors since its launch in 2007.

Shares of LendingClub, the most heavily traded stock on the New York Stock Exchange on Thursday, touched a high of $25.44.

The initial public offering of 58 million shares raised $870 million after being priced at $15 per share, well above the expected range of $12-$14.

The company, whose competitors include Prosper Marketplace Inc and Funding Circle Ltd, is present in major U.S. states and caters to the student, real estate and consumer lending markets.

Venture capital firm Foundation Capital has predicted that about $1 trillion in loans globally will be originated in the peer-to-peer lending market by 2025.

LendingClub is headed by Renaud Laplanche, a former head of product management for Oracle Corp. Former U.S. Treasury Secretary Lawrence Summers and former Morgan Stanley Chief Executive John Mack are on its board.

Its investors include Norwest Venture Partners, Foundation Capital LP, Morgenthaler Venture Partners and Canaan LP.

LendingClub reported net loss of $23.9 million for the nine months ended Sept. 30, compared with a profit of $4.4 million a year earlier. Revenue more than doubled to $143 million.

The company plans to use the proceeds from the IPO for repayment of debt and general corporate purpose.

LendingClub sold 50.3 million shares, while selling stockholders offered the rest.

Morgan Stanley, Goldman Sachs and Citigroup were the underwriters to the IPO.

LendingClub’s shares were up 55 percent at $23.25 at 11 a.m. ET, with more than 11 million shares changing hands.

(Reporting by Neha Dimri in Bengaluru; Editing by Saumyadeb Chakrabarty)

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