The Fastest Consumer Lenders to $1 Billion in Originations

In an interview on CNBC last week Goldman Sachs CEO Lloyd Blankfein shared some news about their consumer lending platform. He said that Marcus had already crossed $1 billion in total loans issued and was on track to cross $2 billion by the end of the year.

Having launched in October 2016 Marcus crossed $1 billion in just eight months. For the online lending industry that is truly breathtaking speed. And it got me wondering. How does that speed compare to many of the industry leaders we know today?

Now, before I present this research let me say one thing. While it is an interesting data point, the speed at which a platform reaches $1 billion in total loans issued it is not an indicator of how successful a platform will become. Clearly, there are many other factors that are more important than speed of growth.

Anyway, I did a little digging and through publicly available information I was mostly able to figure out how quickly many of the major platforms reached their first billion in total loans issued. While the data here may not be exact I am confident it is close and the order is correct.

1. Marcus – 8 months

Marcus has something of an unfair advantage given that it has access to the many billions of dollars sitting on the balance sheet of its parent company, Goldman Sachs Bank. It did not need to secure outside capital to fund its loans and is able to grow as fast as the company wants.

2. SoFi – 14 months

SoFi made its start with its student loan refinance product, a category it invented but in this article we are looking only at personal loans. SoFi launched a personal loan product in February, 2015 and while they never publicly disclose the breakdown of their business lines we can glean enough information from its securitizations to make an educated guess as to when they reached $1 billion in total loans funded. Based on data from Kroll Bond Rating Agency, we know that by August 1, 2016 (when the SCLP 2016-2 securitization closed) SoFi had issued at least $1.3 billion in loans based on the loan pool balance of their first three personal loan securitizations. Based on that data I estimate they crossed the $1 billion mark around April of 2016, 14 months after they launched the product.

3. Marlette – 17 months

We first wrote about Marlette back in June of 2015. Back then they had been in business just 15 months with the Best Egg brand having made their first loan in March 2014. In those 15 months they had reached $800 million, taking just five months to go from $400 million to $800 million. So, most likely by August they had crossed the billion dollar mark.

4. Avant – 28 months

Avant launched in January of 2013 and when they crossed $1 billion in May 2015 they were the fastest platform to that milestone at the time. I interviewed CEO Al Goldstein on the Lend Academy Podcast soon after they hit that milestone and we discussed their growth strategy.

5. Lending Club – 65 months

Lending Club was the first platform to cross a billion dollars back in November 2012. They created a big splash for this milestone with a “Billion Dollar” party in San Francisco and a press blitz that was celebrated widely. Since 2014 they have done more than a billion dollars in new loans every quarter with the high water mark being $2.75 billion in Q1 of 2016.

6. Prosper – 98 months

Prosper was the first marketplace lender to launch in this country all the way back in February 2006. For many years it was just Lending Club and Prosper in the online consumer lending space and for much of that time Prosper was the market leader. Prosper crossed $1 billion in April 2014. They took over seven years to do their first $500 million and just 11 months for them to go from $500 million to $1 billion in total loans issued.

Now, I know there are other platforms that I have not included here. Some of the banking platforms like Lightstream and Discover have not been included as they do not publicly disclose their origination numbers for their online consumer lending platforms. They have both crossed a billion dollars in loans, though. I also did not include online lenders such as Upstart, Affirm or Payoff as it appears they have not reached a billion dollars in personal loans yet. Others such as loanDepot probably have reached a billion dollars but I could not find any information on them passing that milestone.

The narrative of the industry has changed over the last 18 months from one focused on growth to one focused on building sustainable businesses. And that is a good thing. Marcus is clearly an outlier here, doing their first billion in just eight months.

The one takeaway I have from all this is how large the personal loan market is in this country. A well-funded company like Marcus can arrive and quickly attract tens of thousands of new customers. And with over a trillion dollars in credit card debt there is still plenty of room for all these platforms to continue growing.