Lending

This Lending Company got its Investors 100 Times Return

MEDICIFounder and Chief Strategy & Innovation Officer

Lending Club, a peer-to-peer loan specialist, recently witnessed a 55% bump in its stock price on market debut. The company has now achieved a valuation of around $9B. This is more than what the company had expected during its IPO. Founded in 2007, Lending Club provides an online forum to bring together lenders and borrowers. Struggling through some regulatory issues in initial stages, the company has now facilitated more than $6B in loans.

The surge in the stock price of Lending Club saw the stock closing at $23.43. This recent IPO by Lending Club shows a fast-growing P2P market where companies are trying to establish themselves as viable alternatives to traditional lenders. The financial lending space will witness IPOs from other players like OnDeck and SoFi as well.

The fascinating thing to be noted here is the return on investment that investors have received. As highlighted by Silicon Valley Business Journal, an investor had invested in the company stock at 19 cents a share. Compared to the current stock price of $23.43, this is 120 times return. Another investor, who took part in the Series A round of the company’s funding, had invested at 27 cents a share. This is 87 times return.

The success story for investors doesn’t end here. Norwest, Canaan and Amidzad Partners, almost there of whom invested in the first round, are getting around 80 times return on their investments. Morgenthaler, Bay Partners, Norwest and Canaan, who invested in the Series B round, are getting around 120 times return on investment. Series C investors, including Foundation Capital, who invested at 39 cents a share are getting around 60 times return. Google had also invested $125M in the company with an 8% stake and is now getting around 6 times return.

Northwest Venture Partners, the biggest stakeholder with a 16.3% stake, now has a $1.4 billion stake based on current valuation. Other big stakeholders including Canaan Partners (15.7% stake) & Foundation Capital (12.7% stake) have raked in more than a billion dollars. High Profile board members like founder Renaud Laplanche (with 14.9M shares), Lawrence Summers (with 1M shares) and John Mack (with 2.4M shares) are pocketing $223.5M, $15M and $37.5M respectively.

Here is an illustration highlighting the high-value returns Lending Club gave to its investors:

LendingClub-Path-to-IPO

Source: EquityZen

It’s astonishing to see that a single P2P lending company has given such massive returns to its investors. The lending industry will certainly see a bright future with the sector now becoming more attractive for investors.

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”