LendingClub founder Laplanche launches new platform

FORMER LendingClub boss Renaud Laplanche has launched online consumer finance provider Upgrade, his third foray into the US peer-to-peer lending sector after participating in its largest governance scandal to date.

His new San Francisco-based company has raised $60m (£48.3m) in equity and convertible notes from a large group of investors including Union Square Ventures, Ribbit Capital, Vy Capital and Silicon Valley Bank, Reuters reported on Thursday.

Investors also included large Chinese lender CreditEase and Noah Holdings, an investment management firm.

Unlike LendingClub, loans originated on Upgrade will only be bought by large asset managers, and not by individual investors.

Laplanche had already announced his P2P comeback with a new venture called Credify Finance Corporation in November, barely six months after being ousted by the company he had founded in 2006 and launched on the New York Stock Exchange in 2014.

The French-origin businessman had to step down as chief executive of Lending Club in May 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 also significantly impacted investor sentiment towards the emerging P2P sector.

Union Square Ventures, which is also a backer of LendingClub, said in a statement it stands firmly behind Laplanche’s new enterprise.

“We are thrilled to be backing Renaud again, after having worked alongside him at Lending Club for many years,” said the venture capitalist firm’s managing partner Fred Wilson.