Online lending marketplace LendingClub has had a rough few years. After a successful IPO in 2014 that raised over $800 million on a nearly $9 billion valuation, the company soon saw a decline in stock value and eventually the departure of its founder and CEO over suspicious business practices.
But with a new leader—Scott Sanborn—at the helm, LendingClub is seeing a resurgence, with the third quarter of 2019 boasting the company’s first profit in years, and the company processing around 53,000 applications on average every day during that period.
“Trust takes time to rebuild but I knew it was possible. This is a company that is very values driven and it’s something we’ve been really consistent about documenting, incorporating into our hiring practices and evaluating performance against those values,” Sanborn told Deseret News.
Sanborn went on to explain that while the focus for LendingClub in its early days was all about rapid growth, he made the decision to slow down the company’s progress when he took over. “The idea was taking growth off the table and just focusing on rebuilding the trust of investors. So, 2017 was stabilizing the business, in 2018 the team was getting back to growth and market leadership. And this year has been about getting back to profit,” he said.
The strategy led to a net revenue increase 8 percent from the previous year of $176.98 million in 2018 to $190.8 million in 2019. Loan originations during this recent quarter were at $3.1 billion, up 11 percent year over year.
Moving in the right direction, Sanborn hasn’t completely abandoned growth and change. company recently opened an office in Utah last year, with the CEO revealing that LendingClub scoped out several locations—including Denver, Phoenix, Austin, to name a few—before settling on Utah. That office now has more than 500 employees.
And in August, LendingClub launched Select Plus after receiving more than 14 million applications for loans originated by banks in 2018. The platform allows investors to approve borrowers who fall outside the existing criteria used by the bank lender. It was just the latest new offering from the company, which also introduced CLUB Certificates and Levered Certificates.