It was originally aiming to raise $500 million but has now upped this amount in anticipation of the first of its investor meetings next week. We’re hearing that the IPO is likely to start trading in mid-December. It is expected that the company could achieve a valuation as high as $6 billion. The platform has originated more than $6.2 billion of loans since it was founded in 2007.
Notable shareholders on Lending Club’s board include John Mack, former Morgan Stanley CEO, who has 2.4m shares and options. Larry Summers, former US Treasury Secretary, has 1m shares. Lending Club’s founder and CEO, Renaud Laplanche, has 14m in share options.
“LendingClub’s IPO is a bellwether of the sector’s growing importance. We anticipate seeing other major financings, strategic partnerships -- likely including with some major banks -- and M&A across the sector over the coming year.”
This public offering has been compared to the floating of Facebook and Twitter. But Lending Club will be hoping not to follow in Facebook’s footsteps as the company saw its share price collapse in the days following its float – suggesting that it had been massively overvalued.
“It’s big because it’s validation. No one took social media seriously until Facebook IPO-ed. For all the people who are not taking this space seriously it’s harder to ignore once you have companies go public.”
There has been a lot of mainstream media coverage of the Lending Club IPO. It has been rumoured that Lending Club may also be seeking a private buyer ahead of the IPO, although the search is somewhat unlikely to come to anything.
Brendan Sheehy and Nathan Flanders, Fitch analysts, wrote in August:
“A successful IPO could act as a catalyst and benchmark to other P2P institutions to pursue IPOs. Publicly traded shares could also serve as a currency for acquisitions for industry consolidation.”
There is a high level of scrutiny surrounding the Lending Club IPO. Other companies, such as OnDeck, are preparing to go public and the performance of Lending Club will play a critical role in how future alternative finance industry IPOs come to be viewed by investors.