FinTech: LendingClub Is The First Fintech To Acquire a Bank

LendingClub acquires online bank Radius Bancorp for $185 million.

Personal lending platform LendingClub has agreed to acquire FDIC-regulated, Boston-based online bank Radius Bancorp in a cash (75%)-cum-stock (25%) deal worth $185 million. This is the first time that a US fintech has bought up a bank. (

LendingClub Corporation (NYSE:LC) is America’s largest lending platform linking up borrowers with investors, a so-called fintech marketplace. It arranged more than $12.3 billion in loans in 2019 for its three million members.

Included in the purchase is Radius Bancorp’s wholly-owned subsidiary Radius Bank, voted as the best online bank.

Radius has $1.4 billion in assets.

“This is a transformational transaction that allows us to reimagine banking in a way that is free from legacy practices and systems and where the success of LendingClub is aligned with the success of our customers,” said Scott Sanborn, CEO of LendingClub in a statement. “By combining with Radius, we will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business.”

In LendingClub’s earnings call on Tuesday, Sanborn said the transaction will create “the world’s first marketplace bank.”

The rationale for the transaction

Here are the factors working in favor of the acquisition:

  • Two sides of a bank balance sheet at scale: LendingClub = asset generation platform and Radius = deposit gathering platform (This “totally changes the earnings profile of the business,” Sanborn said to CNBC)
  • Radius has a national footprint and no legacy branch network
  • Radius is already a partner of choice for fintech leaders such as Brex, NerdWallet, and NorthOne
  • Deposits are a new funding source for LC
  • LC investors get the comfort of a regulatory framework
  • Savings in fees and interest earned by LendingClub’s current issuing bank partners
  • Reduction in cost of funds by approximately 220 basis points
  • Diversification in revenue
  • Significant synergies
  • Enhancement of earnings power
  • Cash payback on the premium and all acquisition costs in about two years


Furthermore, Shanda, the largest shareholder in LendingClub, will exchange all its voting common stock to non-voting stock. For this exchange, Shanda will receive a payment of $50.2 million.

Related Story:  FinTech: N26’s Shock Announcement of its Departure From the U.K.                                                 

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Alternative Investments: Accelerate Launches An ETF For Alternative Assets
November 25, 2020     Alternative Investments, News

Accelerate Financial Technologies launched its OneChoice Alternative Model Portfolio in September. Aimed at hard-pressed advisors and portfolio managers, the strategy offered a quick and easy way to put together a…
Digital Assets: Japanese Financial Group SBI Launches Crypto Lending
November 25, 2020     Digital Assets, News

SBI Group (TYO: 8473) is launching a crypto lending service through SBI VC Trade, its crypto-focused exchange subsidiary. SBI said it will initially allow customers to tender only bitcoin (BTC),…
FinTech: Hippo Insurance Gets $350M Funding From Mitsui Sumitomo Insurance
November 25, 2020     FinTech, News, Venture Capital

Hippo, the home insurance unicorn, announced Tuesday an investment of $350 million from Mitsui Sumitomo Insurance Company, Limited, a subsidiary of MS&AD Insurance Group Holdings, Inc. In July, Hippo raised…
Venture Capital: Astanor Ventures Launches $325M Fund For Impact Investing in Agtech

Based in Luxembourg, Astanor Ventures combines capital, technology, and sector expertise to invest in businesses that build regenerative, scalable, and nourishing food solutions. Using this philosophy, Astanor has invested in…