Last week LendingClub was the first online lending platform to go public. The industry is growing rapidly and aggressively trying to displace the incumbents. This article provides a great overview of the online lending industry and the disruption it has created.
LendingClub raised nearly $870 million in its IPO. LendingClub was priced at $15 per share, but opened the day on the NYSE well above that at $24.75 per share before closing the day at $23.43 thus implying a company valuation of $8.9 Billion. This valuation exceeds the valuation of some of the largest banks in the country including Comerica, City National,, and CIT Group and marks the 18th largest IPO of the year. And just days later, OnDeck, the leading online lending platform for small businesses, debut its own IPO raising $200 Million at a valuation of $1.3 Billion. LendingClub’s IPO appeared to have rubbed off as OnDeck ’s share price soared by as much as 40% on opening day. These IPOs are just a taste of things to come for the online lending industry.