Lending Club goes public

Lending Club – the leading online-lending-marketplace, based in San Francisco – goes public on Thursday. The IPO will be the first among several fast-growing financial startups expected to go public in the peer-to-peer (P2P) lending industry.

UPDATE: Lending Club’s IPO priced at $15/share, raising about $870 million and valuing the company around $5.4 billion.

Lending Club matches individuals and businesses that want to borrow with lenders – mostly hedge funds, wealth managers and institutional investors. Borrowers pay interest rates ranging from 7.6 to 24.9 percent, based on their credit-worthiness, according to Lending Club’s website. Lenders on the site, meanwhile, can realize attractive net returns, in the 7 to 9 percent range.

Loan applications and underwriting are done online, cutting some of the cost and hassle of borrowing from a regular bank. That could help P2P lenders disrupt the established banking business and grab market share.