[Update: The following story is not true. Warren Buffett has not made an investment in Lending Club. So if you are just stumbling across this article you should keep in mind that it was published on April 1st.]
Big news out of Lending Club this morning. The world’s leading investor, Warren Buffett, has invested $150 million in to Lending Club for a 10% ownership stake that values the company at a whopping $1.5 billion.
This is a coup for Lending Club in so many ways. Buffett is simply the biggest name in investing today and brings with him unparalleled knowledge and experience. There is no one with more finance credibility and this will certainly help raise the profile of both Lending Club and p2p lending worldwide.
This is not Buffett’s first foray into financial services. His company, Berkshire Hathaway has a large stake in American Express, MasterCard, US Bank as well as his new stake in Goldman Sachs that was announced just last week. Clearly, with his latest investment he is aligning himself with a company that could well be at the heart of financial services in the future.
The last cash infusion that Lending Club received was back in June of last year and that valued the company at $540 million. Buffett’s investment means that the value of Lending Club has tripled in less than a year. Given that he is known as the consummate value investor Buffett must believe that at a $1.5 billion valuation Lending Club is still a bargain.
Lending Club has agreed to expand their board from their current eight members to nine to allow Buffett a seat. That is a no-brainer; you want this guy in your board meetings.
I have reached out to the office of the Oracle of Omaha for comment but have not heard back as of this writing. If I ever hear back I will update this post.