As the technology world focuses on all things cybershopping, there's at least one reason to click away from the checkout basket: LendingClub moved one big step closer to its initial public offering.
The online lender announced plans on Monday to raise up to $796 million in its IPO, assuming the underwriters exercise their option to buy shares. Should LendingClub sell shares at $12 apiece, the high end of the range, the San Francisco-based company would be valued at about $5.6 billion, on a fully diluted basis.
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That's a big number—and it can go higher—for a company that generated $176.5 million in sales over the past year. A valuation multiple of over 30 times trailing revenue is something you're more likely to see from a fast-growing software company than an online lender.
Until you consider this, from LendingClub's online road show. The company originated $1.17 billion in loans in the third quarter, or $4.7 billion on an annualized basis. Chief Executive Officer Renaud Laplanche points out how little of a drop in the consumer credit bucket that is. After all, there's $880 billion in credit card balances outstanding in the U.S., and $3.3 trillion in total consumer credit.
Laplanche is nothing if not ambitious. Given that his company offers cheaper interest rates, has lower operating costs because it's all online and is expanding into small business and medical lending, Laplanche sees no reason he can't snag a decent chunk of the existing banking establishment's business.
"While we've been growing fast, we believe we've only scratched the surface of what's possible," Laplanche said in the recorded road show, which went live last week. "We believe the banking system will look a lot different 10 years from now."
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LendingClub expects the offering to price on or around Dec. 10. It's poised to be one of the five biggest IPOs ever for a U.S. Internet company, according to FactSet. Facebook's $16 billion share sale in 2012 was the largest.
LendingClub and rival Prosper Marketplace have pioneered the peer-to-peer lending model in the U.S., by allowing consumers to borrow money online from a network of individuals and institutions that act as investors. Prosper is about 40 percent the size of LendingClub based on third-quarter numbers.