If LendingClub is primarily a technology company, then its projected valuation of $4.3 billion to $5 billion seems entirely plausible. But what if LendingClub is primarily a financial company? At a $5 billion market cap, LendingClub would be trading at 20 times its likely revenue for 2014
By extension, it also has big implications for U.S. banks, because the explosive growth that LendingClub's investors will expect would come at the expense of banks' small business and consumer lending. While banks are investing in marketplace loans on the back end, their businesses would change significantly if they came to rely on online platforms. Until recently, marketplace lending was known as peer-to-peer lending, but LendingClub and other loan platforms have increasingly come to rely on institutional investors, such as banks and hedge funds, rather than individual lenders. Strong loan demand by those large investors has led to a slew of new entrants into the sector. Sam Hodges, co-founder and U.S. managing director of Funding Circle, which operates a small-business loan platform, said marketplace lending is a fundamentally a technology business, though knowledge of financial services is necessary to succeed.