Investment in Marketplace Lenders Has Crashed Since the Start of 2016

Add this to the list of reasons why the unexpected exit of LendingClub Corp. Chief Executive Renaud Laplanche came at the worst time possible for marketplace lenders: a new report says private market funding for the nascent industry declined precipitously in the first quarter.

For a while, it appeared that the private markets hadn’t quite caught up to the public markets where shares of LendingClub and OnDeck Capital Inc. had both been falling from their initial public offerings, but times have changed. According to a report from PricewaterhouseCoopers LLP’s fintech focused platform, DeNovo, marketplace lenders have fallen from one of the most favored fintech sectors to one of the most avoided in the space of just three months.