Digging Deeper with Lending Club: The Peer-to-Peer Loans Marketplace

April 2, 2014         By: Andrew Barnes

Andrew Barnes’ “Digging Deeper” series is based in Silicon Valley and focuses on startups and key innovators and how they are disrupting digital payments and commerce. 

Andrew sat down with Renaud Laplanche, CEO & Founder of Lending Club to talk about the company’s tremendous growth, this thoughts on the payments ecosystem, and plans for 2014.


Barnes:  What business model, and whose business model, are you disrupting?

Laplanche:  Lending Club is transforming the banking industry to make it more efficient, transparent and consumer friendly. Lending Club replaces traditional bank operations with an online marketplace that operates at a lower cost than the banking system, helping borrowers lower the cost of their credit and investors achieve higher returns. More than $3.8 billion in loans have been originated through our platform since inception, including $2 billion in 2013 alone.


As a payments professional, why should I pay attention to Lending Club? 

We now hold about 75% market share of the U.S. peer-to-peer lending industry and we are diversifying our product offerings. Every borrower through the Lending Club platform makes monthly payments, and every investor receives monthly payments. While we’re still a relatively small piece of the U.S. consumer credit market, we’re growing fast. 2013 was Lending Club’s largest year ever.


What are the inefficiencies and the arbitrage in the payments system?

There’s been a lot of innovation in the payments space compared to the lending space, but there’s always room for more. Anywhere there’s a mismatch in pricing, convenience, or speed there’s an opportunity.

I got the idea for Lending Club one morning when I was paying bills and happened to open my bank account statement and credit card statement at the same time. Looking from one to the other I saw that if I carried a balance on my credit card I would pay about 18% interest while that same bank was paying me about 1% on my savings. That’s when I began to understand just how inefficient the traditional banking industry was, and how much opportunity there was to transform it.


What should we expect from Lending Club in 2014?

Our first 2014 announcement is the launch of a small business loan. This is a huge milestone for us. For the past seven years, we’ve been working hard to grow our first product. This week, we launched the first in what will be a series of new products, designed to address a variety of funding and credit needs in our quest to always be more useful to more people, and over time transform the banking industry to make it more transparent, cost efficient and customer friendly.  With this new product, small business owners will have access to customer-friendly, transparent and affordable financing options similar to those Lending Club has been providing on the consumer side since 2007.


Any advice you would offer aspiring entrepreneurs in the payments space?

It’s important to pay close attention to the regulatory environment and how it’s evolving. It can have a huge impact on your business if you’re not paying attention. As a former securities lawyer this came more naturally to me than it probably does to many other entrepreneurs.



About Lending Club

Lending Club is an online marketplace for consumer credit. The platform matches borrowers looking for loans with investors looking for yield. Lending Club uses innovative technologies to lower the cost of the traditional banking system.


About Renaud Laplanche

As Founder and CEO, Renaud is responsible for overseeing the overall strategic direction and operation of Lending Club, which he grew from a disruptive idea in 2006 to an industry leader that facilitated over $2 billion in personal loans in 2013. He also serves as Chairman of Lending Club’s Board of Directors. Before founding Lending Club, Renaud was the Founder & CEO of TripleHop Technologies, an enterprise software company acquired by Oracle Corporation in June 2005.  Prior to that, Renaud was a Senior Associate at New York law firm Cleary Gottlieb Steen & Hamilton. Renaud has an MBA from HEC and London Business School and a JD from Montpellier University.




barnesAndrew Barnes, Senior Executive Writer, Emerging Markets

Barnes is a self-confessed payments and commerce “geek” working in Silicon Valley and San Francisco. He utilizes c-level relationships in tech, startups, retail, and financial institutions to identify emerging market opportunities and analyze challenging business models. Barnes recently launched “Digging Deeper,” a published series focusing on startups and key innovators that are solving digital payments and mobile commerce problems worldwide. He has held executive business development positions in Asia with Sprint, Global One, and 2Roam Mobile, and is an Advisor to the Electronic Transactions Association (ETA). Barnes has an MBA from Waseda in Tokyo 早稲田大学大学院 and a BA from Penn State.  He can be reached on Twitter @AndrewinSV and Linkedin.