The technology company will own a stake of less than 7 percent in Lending Club. And the senior Google executive who led the talks over the investment, David Lawee, vice president for corporate development, will sit as an observer on the start-up’s board.
“We’re really excited about partnering with Google,” Renaud Laplanche, Lending Club’s chief executive, said in a telephone interview. “We’re trying to be the good guys of finance and banking, and Google has a reputation of being the good guys of technology.”
Google’s arrival signals another significant partner for Lending Club, ahead of a potential initial public offering that could come as soon as next year.
The company essentially connects investors with people seeking money after screening the credit histories of potential borrowers. The average FICO credit score of a Lending Club borrower is about 706, while the average loan is about $13,076.
Lending Club claims that its operations provide a lower cost for personal loans, with an average annual percentage rate of about 6.78 percent, below a national average of 9.06 percent. And it estimates that most of its investors have made a profit from the loans