LendingClub, Valued at $3.8 Billion, Acquires Springstone

LendingClub Corp., the largest U.S. peer-to-peer lender, is taking steps to become the one-stop shop for online loans as it plans for an initial public offering. It’s also now valued at almost $3.8 billion.

After expanding from consumer lending into small business credit last month, LendingClub is entering the market for financing private education and elective medical procedures with its first acquisition. The company said today that it purchased Springstone Financial LLC for $140 million.

Since getting started seven years ago, San Francisco-based LendingClub has issued more than $4 billion in personal loans by letting individuals as well as financial firms act as lenders. LendingClub, along with smaller rival Prosper Marketplace Inc., are filling a void left by banks, which are reluctant to make small loans.

“It’s part of our strategy of being more useful to more people and expanding our product line and eventually offering all types of credit,” Renaud Laplanche, LendingClub’s chief executive officer, said in an interview.

To finance the acquisition, LendingClub today said it raised $65 million from funds and accounts managed by T. Rowe Price Group Inc. (TROW), Wellington Management Company LLP, BlackRock Inc. and Sands Capital. The money was raised at a $3.75 billion valuation, up 63 percent from LendingClub’s value in November.

The company also raised $50 million in debt from banks including Morgan Stanley and Citigroup Inc. Laplanche has said he plans to take the company public later this year, after revenue almost tripled in 2013 to $98 million.

Dental Implants

Springstone, also founded in 2007, issues loans to help parents put their kids through private school, from kindergarten through high school. The Westborough, Massachusetts-based company, which originated $340 million in loans last year, also provides credit for medical procedures like dental implants and braces.

Springstone has so far financed loans with capital from traditional institutions. Laplanche said that it will continue to use those sources of funding while also bringing Springstone loans online to be financed by individuals.

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward, John Lear

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