Google has just bet on a less-hierarchical future for the credit industry. The search giant bought a $125 million stake from investors in peer-to-peer credit site Lending Club , together with Foundation Capital. The site cuts out banks by matching lenders with borrowers, offering a better spread between interest and savings rates.
Rather than issue more equity, Lending Club invited current investors to sell their shares. The sale valued the company at $1.55 billion, Lending Club said. Google took more than half of the new stake.
Lending Club says it wasn’t looking for new funding. “We want to have Google as a shareholder,” said Lending Club’s founder and CEO Renaud Laplanche. “We didn’t need additional capital.”
Lending Club generated $34 million revenues in 2012 and is forecasting sales of $90 million for 2013. Laplance said the company became cash-flow positive in the third quarter of 2012 and has since been profitable.