OnDeck Capital Has a Successful IPO Today

OnDeck Capital IPO at the NYSE

Following hot on the heels of the Lending Club IPO last week comes another online lender going public. Last night, OnDeck Capital priced its IPO at $20/share which was above the expectations of $16 – $18 per share. At $20/share OnDeck raised about $200 million and was valued at around $1.3 billion.

This morning its shares began trading on the New York Stock Exchange under the symbol ONDK and like Lending Club it received a solid first day bump. Shares opened at $26.50 and traded up throughout the day, closing at $27.98 – a 39.9% increase over the IPO price.

While OnDeck is an online lender like Lending Club, the two companies have very different business models. OnDeck’s focus is purely on small business lending and they are not a true marketplace. They primarily fund their loans off their own balance sheet. Having said that, they do have the OnDeck Marketplace where institutional investors can purchase whole loans and that program continues to grow. When I had OnDeck CEO, Noah Breslow, on the Lend Academy Podcast back in June he said that he was seeing increased demand from investors and that there was a waiting list for investors looking to deploy capital on the OnDeck Marketplace.

Speaking of growth, OnDeck has been on a tear lately. According to their S-1 in the first nine months of this year they originated $788 million in loans, a 171% increase over the same period last year. Their total loan volume originated since inception stood at just over $1.7 billion as of September 30, 2014.

While last week belonged to Lending Club this week it is OnDeck that is in the spotlight. Today, there have been articles about the OnDeck IPO in The New York Times, The Wall Street Journal, Investors Business Daily and Fortune just to name a few. I also happened to catch Noah Breslow being interviewed on CNBC’s Squawk on the Street this morning where he talked about this seminal time for the online lending industry and the opportunity now for stock market investors to participate in fast growing lenders like OnDeck as well as Lending Club.

So, now the online lending industry has two public companies. And with SoFi indicating they will go public some time next year and CAN Capital weighing an IPO there will certainly be more to come.

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Dan B
Dan B
Dec. 18, 2014 5:25 pm

However…………on a monster up day like today (Dow up 420 pts), ONDK closed down 7.4% at 25 7/8.
Still, a very nice 2 day pop of 29%.

Dan B
Dan B
Dec. 19, 2014 3:02 am

I don’t know about the above photo though. When you were at the LC IPO last week, did they have all the non Caucasians stand in the back? ……………..Oh wait, never mind, my mistake. 🙂

Dec. 19, 2014 6:43 am

I watched On Deck’s road show. After watching that, I probably wouldn’t invest in them. Based on some key things they described about their underwriting, I think they may be in for a rude awakening the next down cycle.

Industry guy
Industry guy
Dec. 19, 2014 11:29 am
Reply to  RawRaw

If that’s the case I hope you aren’t buying smb loans elsewhere. If you think 11 month terms at 50 prcnt aprs are risky you better not touch 3 + year monthly collected loans at low rates. That stuff is implosion city in a downturn.

Industry guy
Industry guy
Dec. 19, 2014 11:27 am

I expect both stocks to be choppy for a while. Both companies need to get thru a few quarters and the lock up.

Both are buys IMO