Lending Club has long been looked at as a potential IPO candidate, and now the moment has finally arrived: the company is going public!
The peer to peer loan provider filed an S-1 form with the Securities and Exchange Commission on Wednesday, and is seeking to raise $500 million in its initial public offering. Underwriters for the IPO include Morgan Stanley, Goldman Sachs and Citigroup. The company has not yet revealed how many shares it plans to offer, or their expected price.
Founded in 2007, Lending Club is an online credit marketplace where investors provide loans to creditworthy borrowers in exchange for the interest income. It bills itself as an alternative to the traditional banking system, providing lower rates to borrowers.
Lending Club makes money through origination and service fees. Borrowers pay a one-time origination fee of 1.11% to 5% of the total loan amount, depending on the loan grade and term. Meanwhile, investors pay a service fee of 1% of each payment received from a borrower.
The S-1 revealed that, in the full year 2013, Lending Club brought in $85 million in revenue, up from $30 million in 2012. Due to high cost of operations, including spending $39 million on sales and marketing, the company came away with $7 million in net income last year, up from a loss of nearly the same amount the year before.
Last month, Lending Club announced that for the first time ever, it had issued $1 billion in loans in a single quarter, bringing it to $5 billion issued to date.
The San Francisco-based company has raised nearly $400 million in venture funding, most recently raising $65 million from T. Rowe Price, Wellington Management Company, BlackRock Inc. and Sands Capital. The round valued Lending Club at $3.75 billion.
Previous investors in the company include Coatue Management, DST Global, Google Capital, Foundation Capital, Kleiner Perkins Caufield & Byers, Union Square Ventures, Thomvest Ventures, Morgenthaler Ventures, Canaan Partners and Norwest Venture Partners.
The 2014 IPO landscape
2014 has been something of renaissance for the IPO market. Lending Club is just the latest big name to
Candy Crush maker King, food delivery service GrubHub, video ad platform TubeMogul, online caregiver platform Care.com, cloud-based customer service software provider Zendesk, high-definition personal camera manufactuerer GoPro, digital coupon provider Coupons.com, and online automotive information and communications platform TrueCar have all already hit the market.
Others that have filed include cloud storage company Box, Web-hosting and domain registration company GoDaddy, inbound marketing software platform HubSpot., online home furnishing company Wayfair, online marketing and advertising company Yodle, online dating website Zoosk and Chinese e-commerce giant Alibaba.
(Image source: lendingclub.com)