San Francisco-based peer-to-peer (P2P) lending marketplace LendingClub has agreed to acquire a digital bank for $185 million.
Boston-based digital bank Radius, with more than $1.4 billion in diversified assets, represents a direct route into online banking for LendingClub, which has facilitated more than $12.3 billion in personal loans in the US last year.
According to LendingClub, the acquisition of Radius will create a digitally native marketplace bank at scale with the power to deliver an integrated customer experience, enabling consumers to both pay less when borrowing and earn more when saving.
Scott Sanborn, chief executive officer of LendingClub, commented: “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.”
“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.”
Mike Butler, president and chief executive officer of Radius, said: “LendingClub has always been a fintech innovator, and I look forward to leveraging the strengths of both of our talented teams as we usher in a new era in banking.”
“We are excited for our employees to operate our virtual banking platform with more resources and for our clients to gain access to an industry-leading lending product. This is a perfect marriage, with LendingClub bringing the leading digital asset generation platform, and Radius contributing a leading online deposit gathering platform, to position the combined company for long-term success.”
LendingClub expects the acquisition to close within 12 to 15 months and recoup the cost inside of two years.