Lending Club Corp (NYSE: LC) reported Q3 earnings last Wednesday, beating analyst guidance by over 850% as the firm’s transition away from its historic peer-to-peer lending model continues to pay off. As of market close on Friday, Lending Club’s stock price is up 33% for the week and 384% from the beginning of 2021.
Lending Club is most known for pioneering the peer-to-peer lending model in the digital age. The service originated as a Facebook application in 2007, before receiving venture capital funding from Norwest Venture Partners and Canaan Partners, launching the firm on its journey to becoming a full-scale lending company.
Today, Lending Club has moved away from peer-to-peer lending and instead has positioned itself as a Neobank, following its acquisition of Radius Bank in October 2020. The firm still provides personal loans to consumers to consolidate credit card debt, fund home improvements, and refinance auto loans. However, since December 2020, the other side of the ledger has been institutional banking.
As of the end of Q3, Lending Club has 3.8 million members, half of which have already utilized Lending Club for more than one loan. The firm has also achieved 80% automation on all loans, driving down underwriting delays as well as overhead costs. With a market opportunity of $1 trillion in revolving consumer loans, the firm has substantial upside to continue its growth.