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Lending Club, the online market that connects borrowers looking for loans with individuals with the money to fund them, has acquired Springstone Financial for about $140 million in cash and stock, the company said this morning.

To help make the deal happen, Lending Club has raised $50 million in debt financing and $65 million in a new equity round from funds and accounts managed by T. Rowe Price, BlackRock and others. Combined, the entirety of the newly secured $115 million was used as the cash component of the acquisition. Springstone received the rest, valued at about $25 million, in Lending Club stock.

Springstone provides loans and payment plans to individuals seeking elective medical treatments and parents looking for help paying for their children’s private educations.

“Parents looking to finance their children’s education and patients undergoing elective procedures will now have access to Lending Club loans and benefit from responsible, transparent and affordable financing options,” CEO Renaud Laplanche said in a statement.

Over the last year, Lending Club has diversified its offerings in other ways. The company started allowing institutions, such as banks, to invest in Lending Club loans. More recently, Lending Club began offering small business loans in addition to personal loans.

And in December, Laplanche told Re/code that the company was pitching large corporations on the idea of using Lending Club as the platform through which they could offer loans to their employees. Google was believed to be one of those being pitched.

At the time, the CEO said the company would be profitable in 2013 on revenue of about $100 million, and would likely go public in 2014.

“There’s no urgency for us to go public,” he said at the time, “but as part of building the brand and establishing Lending Club as the bank of the next decade, I think being a public company is part of building up the brand awareness.”

Lending Club makes money by charging borrowers a loan origination fee, which typically runs around four percent. Loans start as small as $5,000$1,000. Lending Club also charges its investors a service charge of around one percent of borrower payments, according to its website.

The company has raised more than $300 million in equity and debt from Google Capital, Kleiner Perkins and others.



1 comments
MedicalQuack
MedicalQuack

Good old Larry Summers coming back to life again:)  


Here's his former quant from a few years ago on her blog with a few interesting items about the Lending club, scoring and data selling...sooo...here's a quick quote...she presents pros and cons.  By the way in my footer from a couple years ago, great lecture from her and the name of her new book in the works "Weapons of Math Destruction"..can't wait until it comes out.  Video is good and interesting to hear her talk about how the geeks aka quants never get a say but they are the geniuses that do the work, Larry wanted red and blue on the chart...anyone can do that on a spreadsheet but an example of lack of respect of true talent. 


"Lending Club also uses mathematical models to score people who want to borrow money. These act as credit scores. But in this case, they use data like browsing history or anything they can grab about you on the web or from data warehousing companies like Acxiom"

 http://mathbabe.org/2013/08/29/summers-lending-club-makes-money-by-bypassing-the-equal-credit-opportunity-act/

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