OnDeck IPOs And Rides Alt Lending Wave


Alternative lender OnDeck Capital, which focuses on loaning money to small-business borrowers, expects to continue with business as usual after raising $200 million from its IPO on Wednesday (Dec. 17), according to American Banker.

The IPO exceeded expectations in the wake of Lending Club’s billion-dollar IPO last week, with an official $20-per-share price that hit a high of $28 — a 40 percent increase — before falling back to $27.98 at the end of Wednesday’s trading. That jump in stock price value meant the company was valued around $1.8 billion.

But despite the influx of cash and increase in investor scrutiny, CEO Noah Breslow said OnDeck won’t change the way it operates. “We’ve been operating with the discipline of a public business,” he said, adding that OnDeck will double down on small business lending rather than diversifying into consumer, auto, or other types of lending, and calling OnDeck’s small business credit scoring system “our core competency.”

OnDeck currently partners with BBVA and Bank of Montreal Harris on loan origination, and is in talks to partner with more banks, Breslow said.

He also cited an Analysis Group study that concluded that OnDeck’s first $1 billion in loans assisted $3.4 billion in business activity and aided the creation of 22,000 jobs. More to the point for investors, OnDeck’s year-over-year loan origination growth has been 171 percent in the first three quarters of 2014.