Happy New Year everyone. Here is my annual predictions post where I review my previous years predictions and make some new ones for the new year.
Review of my 2014 Predictions
- Lending Club will issue $5.3 billion in new loans
With Lending Club no longer providing timely updates on their loan book we will not know exactly how much they issued in 2014 for quite some time. But I am confident that my $5.3 billion number was overly aggressive. We do know that in the first nine months of 2014 Lending Club issued $2.96 billion in new loans. So, even if they have a breakout fourth quarter I expect they will be under $4.5 billion in total originations for 2014.
- Prosper will issue $1.1 billion in new loans
The opposite happened on my Prosper prediction. Prosper’s growth was far more than I, or anyone else for that matter, expected. They ended the year with $1.6 billion in new loans issued up from just $357 million the previous year.
- Google launches a joint venture with Lending Club around Google Wallet
I was completely wrong on this one. While the official word is that Google and Lending Club are “working together” to develop something no timetable has been set and we may see nothing here for quiet some time.
- Mobile becomes widespread for both online consumer and business lending
While I think mobile use is increasing, particularly on the borrower side, to say it has become widespread today is probably an overstatement. Ron Suber, the president of Prosper, talked often last year about the importance of a mobile strategy for lending platforms but we still haven’t reached a turning point here yet.
- Prosper will be profitable by Q3 2014
I am happy to report that I was right on this one. Prosper turned profitable in the third quarter last year.
I also predicted that Lending Club would have a successful IPO in 2014 although I expected it was going to happen in the first half of the year. But given the public intentions of Lending Club it was a bit of a stretch to call the Lending Club IPO an actual prediction.
My 2015 P2P Lending Predictions
Now on to this year. Let me look into my crystal ball and give five predictions for the coming year.
- Lending Club will issue $10 billion in new loans and Prosper $4.1 billion
I believe the growth will continue unabated at both Lending Club and Prosper but the gap between them will continue to shrink.
- Prosper will remain a private company
Many people are thinking that Prosper will follow Lending Club’s lead here and do their own IPO in 2015. I don’t think that will happen this year. I expect Prosper will remain a private company and will also reject several acquisition offers. They will keep the same core executive team in place for all of 2015 and beyond.
- There will be two new marketplace lenders completing an IPO
So, I have said it will not be Prosper but I do expect two companies to go to the public markets in an IPO in 2015. One, has already confirmed that is their intention: SoFi will go public in the first half of this year. But I think there will be a second IPO and it will be a company that we don’t expect.
- A new platform will launch targeting non-accredited investors
One of the complaints I regularly hear about from readers is the lack of options for non-accredited investors. There are still only two lending platforms available for the investing public: Lending Club and Prosper. I think that changes this year. A new platform will launch targeting small retail investors before the end of the year.
- A midsize bank starts their own marketplace lending platform
There has been a lot of talk about the role of banks in the marketplace lending industry. While some banks, such as Union Bank and Santander, are inking formal partnerships with existing platforms I expect we will see a new bank enter the fray with their own platform. This will not be just an online lead generation website but a true marketplace lending platform with both outside investors and borrowers.
For my bonus prediction this year I am going to talk about acquisitions. I think Lending Club will use their large cash war chest to make at least two new acquisitions. I think they will expand their product offerings by acquiring a traditional lender and one online lender. I have no inside information here, this is just a hunch.
Over to you. I would love to hear whether you think my predictions are on target or way off base. And feel free to make your own suggestions in the comments section below.