MBA Entrepreneurs

MBA Entrepreneur Takes P2P Lender From Start-up To Stock Exchange

HEC Paris MBA graduate Renaud Laplanche is the founder and CEO behind Lending Club, the US's biggest marketplace lender, which recently floated on the NYSE.

Written by Seb Murray | MBA Entrepreneurs | Thursday 19th February 2015 21:42:00 GMT


Renaud Laplanche is the founder and chief executive of Lending Club, a marketplace lender

Renaud Laplanche is the founder and chief executive of Lending Club, a marketplace lender

Two months ago Renaud Laplanche, founder and chief executive of Lending Club, the US’s biggest peer-to-peer lender, rang loud the New York Stock Exchange’s bell to signal the opening of the market.

It was a momentous occasion. The French entrepreneur and MBA graduate had just completed his company’s initial public offering. Initially priced at $15 a share, the stock soared by 56% on its debut, valuing the company at $8.5 billion and making Renaud a multi-millionaire overnight.

The listing was widely viewed as a coming of age moment for the nascent peer-to-peer lending industry, which in the US has already helped consumers and companies raise $8 billion-plus in capital from investors.

Wearing a red jacket with “captain” written across his back, Renaud was making history. “We believe we can make the system more cost-efficient, more transparent and more customer friendly,” he said in a statement.

Lending Club’s evolution from a start-up worth a few million dollars to a public giant has been steered by Renaud, who founded the once-fledgling enterprise in 2006.

By connecting borrowers directly with investors, he found a way to bypass the banks and offer cheaper rates for both consumer and lender.

Renaud is one of myriad MBA holders who are pioneering the burgeoning P2P lending market.

As well as Lending Club, marketplace lending platforms Indiegogo, SyndicateRoom and CrowdBnk were all co-founded by business school graduates.

Lending Club is by far the biggest. The company has funded loans totalling $6.2 billion through its technology-enabled online platform – three times more than its nearest competitor, Prosper.

“Too many small business owners are still having a tough time getting the credit they need to grow their businesses and create jobs,” said Renaud, who graduated from the MBA program at HEC Paris, a leading French Business School.

He is also a frequent guest lecturer at Columbia Business School, based in New York in the US.

After his MBA, he joined the law firm Cleary Gottlieb Steen & Hamilton, working as a senior associate, according to his official company biography. In 2000 he founded his first software company, TripleHop Technologies. By 2005 it was acquired by Oracle Corporation. A year later he began work on Lending Club.

In its first few years of operation, it was able to raise $100 million in venture capital from investors attracted to the growing amount of innovation in the financial services sector. The December IPO raised about $1 billion for the company.

Renaud said there has been acceleration in user adoption, and he sees evidence that the platform can “underwrite, price and service personal loans more efficiently than the traditional banking system”.

San Francisco-based Lending Club had 50,000 borrowers in 2012 and through 2013, added 3,000 individual accounts per month, Renaud has said. He will be hoping that many more join the club.

HEC Paris

Read more stories about students, alumni and programmes at HEC Paris.

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