Once a fintech darling that was called one of the most innovative tech companies to revolutionize consumer finance, LendingClub (LC) has taken a stark fall from grace this year. Already struggling with slowing investor demand before the pandemic, LendingClub got hit hard by a spike in defaults (largely expected across the industry, as smaller lenders like LendingClub and the biggest banks in the U.S. both got hit hard) and suffered a further capital flight from the investors that drive LendingClub’s business.
In its private days, LendingClub was once worth up to $3.8 billion. With shares down ~70% year to date, LendingClub’s ~$320 million market cap is now only a shadow of what it was once worth in the past.
It’s fair to say, in my view, that LendingClub is shrinking – not just from a valuation perspective, but also in the scope of its business. We’ll take