Google and Foundation Capital made a $125 million investment in online P2P lending platform, Lending Club at a valuation of $1.6 billion. Google executive David Lawee now sits as an observer on the Lending Club board.

The $125 million was used entirely to buy out existing investors, who sold 15% to 20% of their shares. No net new funds were added.

Lending Club CEO Renaud Laplanche confirmed that Lending Club is readying for an IPO in 2014.

Lending Club demoed at Finovate three times, most recently at Finovate Startup 2009. Check out Finovate’s 2012 CEO interview with Laplanche here.