Lending Club’s Laplanche to set up rival firm

FORMER Lending Club chief executive Renaud Laplanche is planning his comeback to the peer-to-peer finance industry, less than a year after he was ousted from the company he founded.

Laplanche has reportedly started a new online lending company called Credify Finance Corp., according to corporate filings in several states.

Credify is still in the early stages, but it hopes to start lending to consumers next year, according to sources cited in the Wall Street Journal report.

It will be located in San Francisco’s Silicon Valley, where Lending Club is also headquartered. It is targeting $50m (£40m) turnover next year, according to a state filing.

Former LendingClub executives Jeff Bogan and Adelina Grozdanova have been working with Laplanche, according to the sources.

Laplanche founded Lending Club in 2006 and it grew to become the shining star of the fledgling P2P industry, floating on the New York Stock Exchange in 2014. However, he stepped down as chief executive of Lending Club in May this year, after the company’s internal probe uncovered loan irregularities and corporate governance issues.

The scandal caused the company’s share price to plummet and triggered investigations by both the US Securities and Exchange Commission and the Department of Justice. It had wider ramifications for investor sentiment towards the P2P sector, particularly in the US.  

Earlier this month, Lending Club posted a third-quarter loss of $36.5m (£29.4m), which was an improvement on a second-quarter loss of $81.4m but down compared to $1m profit in the same quarter last year. However, the losses were smaller than analysts had predicted.