LendingTree CEO Doug Lebda wants to make one thing clear: He has no plans to sell his company—despite the fact that major corporations are looking to snatch up FinTechs.
His comments come after two major deals in February: Morgan Stanley is set to acquire trading platform E-Trade for $13 billion, while Intuit plans to buy personal finance firm Credit Karma for $7 billion. And in January, Visa acquired Plaid for $5.3 billion.
“Although everything’s always for sale, my hope is that we are not in the sell mode,” said Lebda, who founded LendingTree in 1996.
In fact, he warns that all of the M&A action could lead to a FinTech bubble.
“What we’re going to need to look for over the next few years is that valuations in some of these so-called startup fintech things — that things don’t get out of control too much and that valuations don’t create another bubble,” Lebda explained.
FinTech startups had a strong 2019, raising $33.9 billion in total last year across 1,912 deals. Last year saw the creation of a record 24 unicorns, 8 of which occurred in Q4’19, including Next Insurance, Bright Health, Flywire, High Radius, Ripple and Figure.
And this year is poised to be another big one, with a Forbes report stating that there have been signs that incumbents are looking to make larger deals. Lebda agrees, noting that it’s these acquisitions that are helping the “big guys” find their place in the FinTech market.
“The industry structure is set up where everyone is looking for their lane. And I’ve always been waiting for this because I love where we sit,” said Lebda, adding that his company’s structure benefits both its customers and the lender they do business with.
That doesn’t mean LendingTree isn’t looking to close deals. In recent years the company has made several acquisitions. It purchased Value Holding Inc., the parent company of personal finance website ValuePenguin, for $105 million at the beginning of the year. In October 2018, the company bought QuoteWizard.com, an insurance comparison marketplace, and acquired Ovation Credit Services for $20.75 million in May 2018.
