LendingClub is acquiring Boston-based online bank Radius Bancorp in a deal valued at $185M, making it the first US fintech company to acquire a bank
- LendingClub, a fintech company that pioneered personal loans made online, is buying a U.S. bank to give it access to a stable and cheaper source of funding, CNBC has learned.
LendingClub gains direct access to deposits, replacing wholesale marketplace funding with a cheaper, more stable source for its personal-loan book — and inherits bank regulation and supervision in exchange.
Second-order effects
Rival online lenders such as Clearbanc, Lendbuzz, and LendUp — all of which have been raising outside capital to fund loan books — now face a competitor whose marginal cost of funds no longer depends on investor appetite, pressuring them toward bank partnerships or acquisitions of their own.
Third-order effects
If the pattern holds, the line between fintech lender and chartered bank dissolves: owning a charter becomes table stakes for scaling consumer lending, and regulators become the gatekeepers deciding how fast fintechs can convert into banks.
The trend: US fintech lenders are moving from renting banking infrastructure to owning it, with LendingClub's acquisition marking the first charter purchase in a wave of vertical integration.
LendingClub is acquiring Radius Bank. $185M for: 1. A core banking platform w/ decent number of clients using its BaaS APIs 2. A suite of commercial lending and treasury management products 3. A direct relationship with key regulators What a steal. https://www.prnewswire.com/...
Really interesting and I think bold acquisition by Lending club of Boston's Radius bank. Good peeps involved I know on Radius side. They are a bank to the neobanks ... https://www.prnewswire.com/...
Holy shit—Lending Club is buying Radius Bank https://www.prnewswire.com/... Quick thoughts: a) this will be subject to a lot of regulatory scrutiny B) lot of fintech co's have been eager to buy a charter so this is a big litmus test c) Radius has crushing fintech partnerships /1/
Verrrrry interesting. Hear from both the CEO of LendingClub and the head of innovation at Radius Bank at our MIT FinTech Conference on March 6! You know we'll be asking about this. Conference link in the comments. https://www.cnbc.com/...
Do you see where this is going? Susan Athey is on the Board of Directors of The Lending Club (as well as Ripple) 🤔 I say again.. Not everyone will have access to “free” funds (via neg. interest, etc). Some will only have access to those with “access” https://www.cnbc.com/... http…
Wow For those who don't follow fintech, this is like a software application company going out and buying up the kind of platform that powered similar applications https://www.prnewswire.com/...
Getting more details and this is more like a steal and a half-Bank but also with great partnerships and an existing BaaS platform https://twitter.com/...