Garnet Capital Advisors Blog

LendingClub Corp., the largest peer-to-peer lender in the U.S., has started preparing for an initial public offering, selecting major investment banks Morgan Stanley and Goldman Sachs Group Inc. to lead the sale, individuals familiar with the situation told The Financial Times.

IPO could raise more than $500 million
The P2P lender could raise more than $500 million by holding this flotation, according to the news source. LendingCorp attained a $3.76 billion valuation during a fundraiser held in April, which involved asset managers Wellington, T. Rowe Price Group and BlackRock.

This figure was 63 percent higher than the valuation the company had in November, said individuals familiar with the matter, Bloomberg reported.

Company enjoys robust growth
Not only has LendingClub enjoyed sharp increases in its valuation, but also robust growth. The company was founded in 2007, and quickly grew to become the largest P2P lender in the world, according to The Financial Times.

Its net revenue surged nearly 200 percent last year to $98 million, according to figures contained in the company's annual filing and reported on by Bloomberg.

LendingClub claims to have issued around $3.8 billion in P2P consumer loans, and that this figure is growing by more than $750 million per quarter, according to Silicon Valley Business Journal. The company boasts that every year, it has grown its annual loan volume by more than 100 percent.

The P2P lender took a major step forward in April, purchasing Massachusetts-based Springstone Financial for $140 million, the media outlet reported. To make this transaction, LendingClub raised $115 million.

Landing key board members
While achieving all these key milestones, the P2P lender has enticed several well-known business figures, including former Morgan Stanley CEO John Mack and former U.S. Secretary Treasurer Lawrence Summers, to serve on its board of directors.

LendingClub has raised funding from various sources, including Google Capital, BlackRock and T. Rowe Price, according to the news source.

Shooting for a $5 billion valuation
When the company goes public, it will likely aim for a valuation of around $5 billion, The Financial Times reported. This lofty goal illustrates how much the market for technology IPOs has warmed up lately.

The climate for these primary offerings has been erratic, starting the year strong but then slowing down in the spring as many global market participants fled high-growth companies, according to the news source. Several sectors, including technology stocks, have recovered lately, setting the foundation for companies to hold some lucrative IPOs.

IPO could draw great interest
Since LendingClub is the most well-known firm in its industry, its IPO will likely draw the attention of many other lending firms, The Wall Street Journal reported. Retail investors might also tune in to monitor this key event, as company CEO Renaud Laplanche previously stated that a primary offering would likely include a large number of these individuals.