By Joanna Glasner and Gené Teare
We’ve heard a lot about troubles in the marketplace lending space over the last couple months. LendingClub, the industry bellwether, ousted its founder-CEO and revealed it is under federal investigation. Its stock has plummeted, contributing to a steep fall for shares of small business lender OnDeck.
Add in layoffs at P2P rivals Prosper and Avant, a postponed IPO and litigation for consumer lender Elevate Credit, and a U.S. Treasury Department report hinting at a need for more regulation, and it’s clear why investor enthusiasm for marketplace lending would be diminishing.
So where are things going? Funding activity has slowed in recent months, and private valuations look ripe for reductions. A key driver will be falling public market comps.
At CrunchBase, we took a detailed look at U.S. companies in the marketplace and alternative lending space that have raised $20M or more in private investment. The analysis (see full chart below) shows a total of $3.9 billion in venture and growth-stage investments in the industry, the vast majority in the past three years. Companies raised an additional $2 billion in debt financing, also mostly in the past three years.
For the full article, please visit “CrunchBase Spotlight: Data hints at down rounds, but not wipeout, for marketplace lending” on TechCrunch.
