Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

P2P Lending Surpassed $2B In Loan Origination

By Dara AlbrightMarket OverviewMay 07, 2013 01:40AM ET
www.investing.com/analysis/p2p-lending-surpassed-$2b-in-loan-origination-165863
P2P Lending Surpassed $2B In Loan Origination
By Dara Albright   |  May 07, 2013 01:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Since 2006, P2P and online lending have enjoyed explosive growth. Lending Club and Prosper, America’s two largest P2P lenders have now surpassed $2B in loan origination, and P2P has captured the attention of industry legends, the financial media, the investing public and even today’s technology giants.

Lending Club’s board is comprised of such recognized leaders as former Visa Inc. President Hans Morris; the former U.S. Secretary of the Treasury Lawrence H. Summers; Morgan Stanley Chairman Emeritus John Mack and Kleiner Perkins Caufield & Byers general partner Mary Meeker. Prominent venture capitalist firms invested in the sector include: Draper Fisher Jurvetson, Accel Partners, Sequoia Capital, Union Square Ventures, Foundation Capital, Thomvest and Kleiner Perkins Caufield & Buyers.

But the industry reached a new pinnacle last Thursday when Google announced it has led a $125 million deal to buy a stake in Lending Club from existing investors. This transaction values Lending Club at $1.55 billion – nearly tripling the valuation of its last fund-raising round less than a year ago.

Upon the announcement hitting the wires, @lendingclub enjoyed well over 5,000 mentions on Twitter (compared with 5-10 on a typical day), and at its peak averaged 5-7 tweets per minute.

“Google’s investment into Lending Club is further evidence of the current sea change that has begun in financial services. It signals a decisive moment for the validity of P2P lending, the disruption of traditional banking as well as the convergence of finance and information technology. I look forward to hearing Lending Club’s CEO, Renaud Laplanche, discuss the implications of the Google investment at next month’s LendIt conference, the world’s first conference dedicated exclusively to the P2P & online lending industry,” stated Peter Renton, Founder of Lend Academy and author of The Lending Club Story, the definitive guide to the world’s leading peer-to-peer lender.

Although momentous for the consumer credit sector, many have been wondering how P2P’s triumphs relate to securities-based crowdfunding. The fact is, because P2P lending is the precursor to securities-based crowdfunding, its achievements are not only dramatically impacting the emerging crowdfunding industry, they are helping shape it. Securities-based crowdfunding or “Peer-to-Business (P2B)” is simply the next iteration of P2P. However, instead of peers providing personal loans to its peers, securities-based crowdfunding will allow peers to invest in the businesses of its fellow peers in exchange for equity or debt. By demonstrating that people are more efficient at financing each other through the use of social media than with conventional banking intermediaries, P2P has effectively validated the “crowdfinance” model for the entire industry, even compelling the financial establishment to enter the fray.

In just seven years, P2P lending has not only awakened Wall Street and secured funding from many of the same venture capitalists that had the foresight to fund some of the most disruptive industries in history, it has attracted the attention and capital from the world’s most prominent Internet company. While we can all speculate on what interest a search engine would have in social finance, one cannot help but view Google’s assimilation of P2P as a defining moment for the global financial markets. As the next evolution of “fintech” (the union between finance and technology) descends rapidly upon us, traditional banking methods and financing structures are about to become as obsolete as the phone booth.

Much like P2P’s prominence began escalating after the SEC effected the rules for P2P lending in 2008, upon the implementation of title III of the JOBS Act, expect securities-crowdfunding to quickly garner similar enthusiasm from the Street, the venture community, and yes, even tech behemoths. As P2P continues to mark major milestones, it is paving the way for the mainstream adoption of securities-based crowdfunding. As such, P2P’s achievements should be carefully observed as well as celebrated by the entire crowdfunding movement. Securities-based crowdfunding is tomorrow’s P2P.

P2P Lending Surpassed $2B In Loan Origination
 

Related Articles

James Picerno
S&P 500 Risk Profile By James Picerno - Jan 21, 2022

The US stock market is knee-deep in another one of its periodic bouts of selling. Is this the big one or just another short-term correction? The only honest answer, as always:...

Paul Rejczak
S&P 500: Should We Buy the Dip? By Paul Rejczak - Jan 21, 2022

The S&P 500 broke below its early December low. Are we in a new bear market or is this still just a downward correction? The broad stock market index lost 1.10% on Thursday...

P2P Lending Surpassed $2B In Loan Origination

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email