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More big news out of Lending Club this morning. I reported in May about Google’s investment in Lending Club that resulted in a $1.55 billion valuation for the company. Today, Ari Levy from Bloomberg broke the story that Russian billionaire Yuri Milner’s DST Global and Coatue Management LLC have invested $57 million in a secondary round at Lending Club. The story also stated that with this transaction Lending Club is now valued at $2.3 billion, up 48% in just the last six months.
The transaction values LendingClub at $2.3 billion, said two people with knowledge of the deal, who asked not to be identified because the valuation is private. LendingClub Chief Executive Officer Renaud Laplanche said the share sale closed yesterday and consisted entirely of stock purchased from early backers.
As Laplanche said above this is not money that is going on to Lending Club’s balance sheet, it is a secondary round. Meaning that shares have been purchased from existing Lending Club shareholders.
The increased valuation does not surprise me at all. In October, Lending Club’s monthly new loan volume was up 50.7% from May when the Google deal was announced. So an increase in valuation of 48% is right in line with this increase.
Here is another interesting little nugget from the story:
At its new valuation, LendingClub is among the highest-priced private technology companies now that Twitter Inc. (TWTR:US) is publicly traded. Startups worth more than $2 billion include file storage provider Dropbox Inc., room-sharing service Airbnb Inc. and online billboard Pinterest Inc.
Lending Club is in some pretty good company there. It certainly bodes well for them as they gear up for their IPO that is supposed to happen next year. And I wouldn’t be surprised to see more transactions like this one before that IPO happens.
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Yuri Millner huh? He’s an incredibly astute “value” investor. I believe it was just last year that he bought a truly spectacular mansion not 25 miles from me in Los Altos Hills. A mansion that was worth around $50 million! Of course, he somehow managed to pay $100 million!! Where were all these astute people when I was selling my 911 a few years ago. 🙂
While I can’t say I know Yuri Milner at all, from what I have read about him it seems this is a pretty typical deal for him. He comes in to tech companies before they do an IPO and buys up big chunks of them. It worked for him with Facebook, Twitter and other investments. And when you are a billionaire I guess you can afford to overpay on real estate.
When you are a billionaire you can afford to do anything. But only you would call spending $50,000,000 more than market value on a house, an “overpay on real estate”. What would you call a 30 car multiple fatality pileup on the freeway?………. Let me guess, a mishap? 🙂
Maybe the early LC investors should have held out for more when they saw this genius coming.
What a horrible analogy, Dan. I am left speechless.
Yes, the world can be a hellish, brutish & horrible place at times. Imagine how much suffering could be eased if just one obscenely rich guy would instead donate the extra $50,000,000 to the ones who suffer from the horrors of everyday reality…………..instead of handing it over unnecessarily & nonchalantly to another obscenely rich guy for no other purpose but the purchase of one obscenely spectacular mansion.
Not surprising to me either. I mean apparently snapchat is worth 3 billion dollars to Facebook and has no income. Just kidding of course. Good and exciting stuff and can’t wait for the IPO!
Yes, Ryan, I think those Snapchat founders are crazy to reject the Facebook offer. It just shows you have crazy some people are in Silicon Valley in their search for the next big thing. At least Lending Club is a real business with real revenue and even profits.