It came as a complete shock to everyone. When I woke up on May 9th last year I could not believe the news I was reading. Renaud Laplanche had been forced to resign from Lending Club, a company that he had founded and where he was the public face.
Back then everyone wondered about the impact this would have on the industry. No one knew what was going to happen but we all expected both Lending Club and the whole industry was going to be in for a rough time. This came at a time when the industry was already experiencing a downturn. Just the week before Prosper had announced layoffs and many other platforms were also struggling to attract investors.
Five Lessons from the Past Year
Today, I thought it would be useful to take a step back and reflect on what we have learned in the past year.
- The industry is bigger than one person
While it is true that Renaud Laplanche was an imposing figure in the marketplace lending industry with Lending Club the dominant player, the industry did not fall apart because of his departure. While it made headlines around the world and many industry players saw their struggles increase it did not trigger an industry collapse as many at the time predicted. In fact, we have seen only a handful of small platforms go out of business in the past year and several platforms have continued to grow.
- Investors still need yield and borrowers still like installment loans