Reflections on Lending Club’s Shareholders Meeting

We shared on MarketWatch what we expected to hear four days before Lending Club’s annual shareholder meetings.

One of our ‘predictions’, was for Lending Club to promise resuming growth at controlled costs, which they just did. They announced a 12% reduction of their workforce (letting go 179 people), while continuing to provide incentives to investors “in an effort to reignite the platform”. Although origination volume is down by approximately 30% since last quarter, the company expects to grow again at the beginning of 2017, both in term of revenue and EBITDA.

To re-assure investors, Lending Club has increased its compliance resources and put in place additional measures to monitor data integrity and ensure proper control.

We also predicted that Lending Club would setup a stable management base, and the board confirmed Scott Sanborn as CEO and President of the company. While not a super-high profile star from the traditional financial world, Mr. Sanborn already has an excellent knowledge of the company, having originally joined in 2013 as the Chief Marketing Officer.
Unfortunately, they did not clarify how they see their mix between institutional and individual investors evolving in the future.

Overall, this shareholder meeting did not bring any big surprises, and we believe Lending Club will continue working more or less like before. Which is, incidentally, not a bad thing, as the returns of our clients can attest….