Lending Club, the largest online marketplace for loans, has filed to go public on Wednesday, seeking $US500 million from its IPO.
That would make Lending Club’s IPO one of the 10 biggest stock market debuts of an Internet company ever, according to The New York Times.
According to the S-1, Lending Club’s net revenue in the first six months of 2014 was $US86.9 million, a 134% increase from last year’s $US37.1 million. But its net income dropped from $US1.7 million in the first half of 2013 to a net loss of $US16.5 million this year.
The company says it has processed over $US5 billion worth of loans since its founding in 2007. Over $US1 billion worth of those loans occurred in the second quarter of 2014, it says, showing the type of growth it’s seeing in recent years.
Lending Club has raised $US392.9 million so far from some of the most prominent investors, including Kleiner Perkins Caufield & Byers, Google Capital, and Norwest Ventures. Its board members include Kleiner Perkins’ Mary Meeker, ex-chairman and CEO of Morgan Stanley John Mack, and former U.S. Treasury Secretary Larry Summers.
Morgan Stanley and Goldman Sachs will lead the IPO process.
Lending Club is a peer-to-peer loan site that lets users take out personal loans from other individuals or institutional investors. It doesn’t loan its own money, but only serves as a marketplace for these transactions.
The company makes money by charging 1% to 6% of the initial principal amount of the loan. It gets another 1% in servicing fees from investors, and roughly 1% for management fees.
On average, users can take a loan out at an interest rate of 14%, making Lending Club a better option than most credit cards, which charge higher rates. It’s also a safe platform for investors because Lending Club checks to see if the borrower is credit-worthy.
“I believe we can transform the current banking system into a frictionless, transparent and highly efficient online marketplace that provides affordable credit to borrowers and creates great investment opportunities for investors, helping millions of people achieve their financial goals,” Renaud Laplanche, CEO of Lending Club, wrote in the company’s prospectus.
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