This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Lending Club Picks Up IPO-Breed of Investors

NEW YORK (TheStreet) - Peer-to-peer lender Lending Club said on Thursday it has picked up the type of investors it would want when the company is taken public, after raising $65 million from T. Rowe Price, Wellington Management, Blackrock and Sands Capital as part of its acquisition of Springstone Financial.

Peer Lending Lures Yield-Hungry Investors

Lending Club, however, continued to put off answers about the timing or size of its seemingly inevitable initial public offering.

On Thursday, Lending Club said it acquired Springstone Financial for $140 million in cash and stock, in the first-ever acquisition of a traditional financial services firm by a peer-to-peer lender. Founded in 2007, Springstone provides financing for K-12 private education, tutoring and medical services and facilitated over $340 million in loans in 2013.

Lending Club made its first loan in 2007 and through steady growth, has originated over $4 billion in personal loans among 250,000 customers through its platform.

To finance Thursday's acquisition, Lending Club raised $65 million in a new equity round among T. Rowe Price, Wellington Management, Blackrock and Sands Capital. The company also raised $50 million in debt financing for the cash portion of its Springstone transaction, and it paid the specialty lender a further $25 million in Lending Club stock.

Regarding the company's newest funding round, CEO Renaud Laplanche said in a conference call that Lending Club has picked up a breed of investors it would hope to have when it becomes a public company. Laplanche called the fund managers "the type of reputable investors that we would want when we take the company public." Laplanche would not comment on any plans that Lending Club may have to go public.

"We believe that Lending Club has an opportunity to transform an important part of the banking system into a transparent online marketplace," Henry Ellenbogen, a portfolio manager at T. Rowe Price said in a statement.

"The Springstone acquisition is another step in that direction, and we are very excited at the prospect of being a long term equity partner of Lending Club," he added.

Valuation Doubles

Thursday's equity round values Lending Club at $3.76 billion, according to calculations by the Financial Times, a more than doubling of the company's valuation since the company raised money from Google (GOOG) a year ago.

A disclosure on Thursday indicated that Lending Club continues to record strong growth and has tipped into profitability.

Lending Club earned $98 million in net revenue in 2013, and a net profit of $7.3 million. Springstone, that filing shows, generated $17.3 million in net revenue and a profit of $8.6 million last year.

-- Written by Antoine Gara in New York.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs