Upcoming LendingClub IPO Scores High at Triton Research

September 16, 2014 11:10 AM EDT

Triton Research initiated research coverage on the upcoming IPO for LendingClub with a 8.06 rating, which is substantially higher than the firm's average rating of 6.58.

Lending Club is an online peer-to-peer (P2P) lending marketplace that matches “investors” (those seeking to fund unsecured loans up to $35K; typically financial institutions and accredited individuals) with consumer “borrowers” (those who require loans.

"Lending Club shows the power of narrowly-focused online marketplaces," Triton Research said. "In the same way the Uber’s marketplace functionality is designed specifically for auto transport and GrubHub’s is designed for food delivery, Lending Club has developed a comprehensive solution that allows parties that do not know each other to borrow and lend money safely and conveniently. Lending Club’s model offers attractive margin, scale and risk characteristics to the Company, addresses an enormous opportunity, and represents a viable threat to established bank and credit card incumbents. Lending Club operates in a regulatory grey area as it is not a bank or a broker-dealer, which can be a benefit and also a risk. The Company is the largest peer-to-peer lender in the U.S. by far. At 8.05 it is the 2nd highest overall score since Triton Research began scoring IPO companies 18 months ago."

Competitors include: Prosper, Funding Circle, OnDeck, Upstart, MarketAxess.

Lead underwriters for the deal are Morgan Stanley, Goldman Sachs and Citigroup. Investors include: Norwest Venture Partners, Canaan Partners, Foundation Capital, Morgenthaler Venture Partners and Google.

LendingClub has not yet started its roadshow.

Triton Research has a 53-page report on Lending Club available to clients.

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