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There's a certain irony to the upcoming IPO of LendingClub, the nonbank lender that's used algorithms, software and a Web-based platform to take on the traditional banking system. The biggest winner in the deal is likely to be none other than Wells Fargo, the largest U.S. bank by stock market capitalization.
It's an indirect relationship. LendingClub, like most emerging tech companies, is backed by venture capitalists, with the four top firms owning more than half the company, according to its IPO prospectus filed on Wednesday. The investor with the biggest stake is Norwest Venture Partners, based in Palo Alto, California. Norwest is unusual in that all the capital for its funds comes from a single investor—Wells Fargo. Most firms bring in money from an array of endowments, foundations and universities as well as big financial institutions.
Norwest and venture firm Canaan Partners first backed LendingClub in 2007, in a $10.3 million financing round. At the time, LendingClub was using Facebook to find potential borrowers and had yet to issue $1 million in loans. Seven years later, LendingClub is way off Facebook and has originated more than $5 billion in loans, with about 20 percent coming in the most recent quarter. Norwest's Jeff Crowe joined the board in 2007 and remains a director.
Katie Belding, a spokeswoman for Norwest, said Crowe was unavailable for an interview because of the pre-IPO quiet period.
Under a typical venture structure, the firm and its partners keep 20 percent of the profits generated from investments, sending the remaining 80 percent back to the fund's investors, known as limited partners. Based on LendingClub's most recent valuation in April of $3.8 billion, Norwest's 16.5 percent stake in LendingClub is worth $627 million. Assuming a normal 80-20 split, Wells Fargo's share of that is right around half a billion dollars.
Those numbers are rough for several reasons. Wells Fargo's arrangement with Norwest is confidential, so the 80 percent number is just an estimate. Beyond that, LendingClub's projected valuation at the time of its IPO will surely be well above $3.8 billion, but insiders are typically unable to sell in the six months after the offering. So if LendingClub debuts in November, Wells Fargo wouldn't see the gains until May 2015 at the earliest. A lot can happen between now and then.
Even if that number doubles (or triples or quadruples), it will be a drop in the bucket for Wells Fargo, which has a market value of $268 billion and assets of $1.6 trillion.
Read MoreWells Fargo is a juggernaut
But LendingClub's revenue is more than doubling annually at a time when Wells Fargo and other banks are struggling to find growth, in part due to more strict regulations put in place after the financial crisis. With LendingClub headed for the public markets, its alternative financing model of issuing loans online with capital provided by retail and institutional investors is likely to get increased publicity.
Wells Fargo sees what's happening around it. In addition to its Norwest relationship, the bank this month announced a start-up accelerator to partner with and invest in up-and-coming technology companies.
In that regard, Wells Fargo has at least one advantage over its peers. The bank is located in the tech hub of San Francisco, a matter of blocks from LendingClub.
—By CNBC's Ari Levy