User:EFlynn at LendingClub/LC New History Draft

History
LendingClub was initially launched on Facebook as one of the platform's first applications. After receiving $10.26 million in its Series A funding round in August 2007, from venture capital investors Norwest Venture Partners and Canaan Partners, LendingClub was developed into a full-scale peer-to-peer lending company.

On April 8, 2008, LendingClub temporarily suspended new lender registration and canceled its affiliate program while it awaited approval to issue promissory notes to lenders. On June 20, 2008, LendingClub filed an S-1 statement with the U.S. Securities and Exchange Commission seeking the registration of $600 million in "Member Payment Dependent Notes" to be issued on its website. On August 1, 2008, LendingClub filed an amendment to its S-1 outlining new interest rate formulas as well as details on a "resale trading system". On October 14, 2008, LendingClub announced its completion of the SEC registration process, posted the filed prospectus on its website, and resumed new lender registration. In March 2009, LendingClub raised $12 million in a Series B funding round led by Morgenthaler Ventures.

Pre-IPO growth
In April 2010, the company raised $24.5 million in a Series C funding round led by Foundation Capital and joined by existing investors including Morgenthaler Ventures, Norwest Venture Partners and Canaan Partners. In August 2011, LendingClub raised an additional $25 million in venture capital from Union Square Ventures and Thomvest. This led to LendingClub earning a $275 million post-money valuation and an increase of $80 million in valuation from the preceding year. Thomson Reuters founder Peter J. Thomson also invested an unspecified amount of his personal fortune into LendingClub. In 2011, the company moved its headquarters from Redwood City, California to San Francisco.

In 2012, LendingClub employed about 80 people, with Renaud Laplanche continuing as the company's CEO and chairman of its board of directors. In June 2012, the company received $15 million in new funding from Kleiner Perkins Caufield & Byers and $2.5 million of personal investments from John J. Mack. Kleiner Perkins partner Mary Meeker joined Mack on LendingClub's board of directors. This led to a $570 million valuation of the company. In November 2012, LendingClub surpassed $1 billion in loans issued since its inception.

In May 2013, Google Capital purchased a stake in LendingClub. LendingClub also began recruiting institutional investors and partnering with smaller banks in order to help streamline their small loans operations. In June 2013 the company partnered with Titan Bank in Texas and Congressional Bank in Maryland in order to help them facilitate loans that would have been otherwise unprofitable for them.

Initial public offering (IPO)
In March 2014, LendingClub began providing loans to small businesses. In April 2014 LendingClub acquired Springstone Financial. In May 2014 LendingClub formed a partnership with Union Bank. On August 27, 2014, LendingClub filed for an IPO with the SEC, the offering taking place in December 2014. On December 10, 2014, the company raised almost $900 million in the largest U.S. tech IPO of 2014. The stock ended the first trading day up 56%, valuing the company at $8.5 billion.

Product extensions
Laplanche told Forbes in April 2015 that LendingClub would expand into car loans and mortgages. LendingClub also announced a partnership with Google to extend credit to smaller companies that use Google's business services. The company signed partnerships with Google, Alibaba, BancAlliance, and HomeAdvisor, including vetting community bank lenders for BancAlliance, in order to send people on its platform to various community finance institutions. In June 2015 at Clinton Global Initiative, former president Bill Clinton announced a partnership between LendingClub and Opportunity Fund. The partnership was formed to provide $10 million in financing to California small businesses that were underserved by traditional lenders. LendingClub and other small business lenders partnered with Sam’s Club to deliver its “business lending center” product. In August 2015 the company launched LendingClub Open Integration (LCOI), a series of APIs designed to make it easier for online brokers and advisors to connect investors with the company's loans. In October of that same year, the company launched a multi-draw line of credit product for small businesses.

Scandal and struggle
Like other peer-to-peer lenders, including Prosper and SoFi, LendingClub experienced increased difficulty attracting investors in early 2016. This led to the company increasing the interest rate it charged borrowers. The increase in interest rates and concerns over the impact of the slowing United States economy caused a large drop in LendingClub's share price.

In April 2016, a LendingClub employee reported to Laplanche that the dates on approximately $3 million of the firm's loans appeared to have been altered. LendingClub's internal auditor engaged an outside firm to investigate the report. This investigation found that $22 million in loans which had been sold to the Jefferies investment bank did not meet the bank's investment criteria. LendingClub bought these loans back from the bank and resold them.

The New York Times reported that the investigation also found that Laplanche had not disclosed to the board that he owned part of an investment fund that LendingClub was considering purchasing. The Wall Street Journal stated that Laplanche was found to have not fully disclosed what he knew about the problematic loans.

On May 6, 2016, LendingClub's board made it clear to Laplanche that he no longer had their confidence, leading to his resignation on May 9. The Wall Street Journal reported that Laplanche had been fired by the board. By that time, three of the firm's other managers had also been fired or resigned as a result of the problematic loans. LendingClub's stock price fell by 34 percent after Laplanche's departure was announced. This placed the stock price at 70 percent of the price it had achieved at the time of the company's initial public offering. As a result of the incident, the Securities and Exchange Commission and Department of Justice, began investigating LendingClub's disclosures to investors. The Federal Trade Commission also sued the company.

In December 2017 the Financial Times reported that LendingClub "has struggled to overcome the effects of a governance scandal last May", and that the firm "has battled to keep big investors buying loans" despite improvements to its internal governance. These challenges led the company to raise its loss estimate, resulting in further drops in its share price.

In September 2018, LendingClub paid a $2 million penalty to settle the DOJ investigation and settled with the SEC when the commission decided not to pursue charges against the company. In July 2021, the company agreed to pay $18 million to settle the charges brought against it by the FTC.

From peer-to-peer to marketplace banking
In 2019, LendingClub further expanded beyond peer-to-peer lending services, starting its Scale program, which sells representative samples of the company's pool of loans to institutional investors such as banks, hedge funds, and asset managers. That same year, the company stopped originating small business loans, referring new SME customers to Opportunity Fund and Funding Circle. It also launched its LCX platform, which by offering same-day loan settlement reduced the amount of time it took for institutional investors to invest in the company's loans by several weeks.

In February 2020, the company began its $185 million acquisition of Radius Bank. In August 2020, the company discontinued its secondary trading platform because its partner Folio, which offered the secondary market, was purchased by Goldman Sachs. At the end of 2020, LendingClub shut down its peer-to-peer investing platform as part of its transition toward becoming a marketplace bank.

LendingClub's acquisition of Radius Bank was finalized in February 2021. In June 2021, the company hired several executives who had worked for large banks such as Bank of America, BBVA, and Wells Fargo to help grow its new business model. In May 2022, LendingClub started offering a secondary trading platform on LCX.