Last month I visited San Francisco and brought along my trusty audio recorder for a podcast interview in the Lending Club offices with Scott Sanborn. Sanborn joined Lending Club in 2010 as the Chief Marketing Officer and last year was promoted to Chief Operating Officer. He is responsible for Lending Club’s day to day operations and he has still maintained his marketing role.
We talked about a number of different topics in particular the rapid growth of Lending Club and how they are managing this growth, balancing demand from from the retail and institutional investors, Lending Club PRIME, Policy Code 2 loans and of course, the topic that seems to be on everyone’s mind these days: the Lending Club IPO.
In this podcast you will learn:
- How Lending Club decides the percentage of loans that go to the retail platform versus the whole loan platform.
- How they have been able to scale their borrower supply so dramatically.
- The different channels that provide borrowers to Lending Club.
- Why they don’t look to their existing borrower pool as a driver of new business.
- How Lending Club PRIME works and the changes that were made last year.
- When and how often Lending Club PRIME runs.
- An explanation of Policy Code 2 loans and how they use it.
- When these Policy Code 2 loans may become available to the retail investor.
- How Sanborn feels about the race at “feeding time” when the loans are added to the platform four times a day.
- When and how we will see investor and borrower equilibrium again.
- How the Lending Club IPO will open their platform to investors in all 50 states.
You can subscribe to the Lend Academy Podcast via iTunes or Stitcher. There is an audio player directly below or you can download the MP3 file here.
Podcast: Play in new window | Download | Embed
Subscribe: Apple Podcasts | Android | RSS
Really enjoyed this podcast Peter. Interesting bit on release times and the feeding frenzy. Any changes could throw a huge wrench in the third party tools that exist today, so it will be interesting to see how it evolves. If they release notes throughout the day it will simply cause all of these tools to hammer away on Lending Club’s servers all day. I will be curious to see if they eventually move to a “get in line” model for fairness similar to what PRIME seems to be today. I was a little surprised to hear the thoughts on someone needing just any B,C,D etc. note to simply balance out their target allocation. Perhaps this is fine for some investors, but as a small retail investor (and a huge fan of the industry), I enjoy trying to maximize my returns to the best of my ability. It has come up on the forum before about how some folks would be happy with investing in every single loan for a specific grade and the returns that would come along with that. The problem there is that a certain percent of the very best notes are gone in seconds and how would that affect returns. Time will tell what happens, but this certainly made me think about where this is all could be headed.
Hi Ryan, As Sanborn said they don’t want to reward the investors with the fastest computers but I think change here will happen slowly. With that in mind and with the movement towards third party API investing I think we will see some kind of allocation model for everyone using the API – put in place so that PRIME and regular retail investors are not negatively impacted. Will be very interesting to see how it evolves.