Alternative small business lender OnDeck has announced plans to raise $150 million in an initial public offering.
According to analysis from The Wall Street Journal, the IPO could value OnDeck at $1.5 billion. The Journal also suggested that the $150 million number for the IPO was likely a “placeholder amount” that will probably change.
While the company understandably has few words to share about its impending IPO, OnDeck CEO Noah Breslow has said a
number of interesting things about the future of his company and the small business community it serves. Asked about the future of the alternative lending industry over the next 10-20 years in an interview with NPR this summer
, Breslow replied: “I think it loses the designation of alternative.”
“I think just like today I buy a plane ticket online with Priceline.com. Maybe 20 years ago I would have talked to a travel agent. You know – we are going through that entire cycle. We’re probably in year five of a 20-year journey in terms of lending.”
more than $107 million in revenue in the first three quarters of 2014, and a net loss of $14.4 million. The revenue figure represents a year-over-year gain of 2.5x.
Here are a few key metrics to keep in mind:
- OnDeck will trade on the New York Stock Exchange (NYSE) under the ticker symbol, ONDK
- Lead underwriter is JP Morgan Stanley
- Originated more than $1.7 billion in loans to 25,000 small businesses
- Raised more than $170 million in venture capital funding, and more than $300 million in debt financing
- Collected more than 4 million customer payments
- Previous investors include:
- RRE Ventures
- Institutional Venture Partners
- Village Ventures
- SAP Ventures
- First Round Capital
- Google Ventures
- Tiger Global
Also underwriting the IPO were Deutsche Bank Securities, Merrill Lynch, Morgan Stanley, and Pierce, Fenner & Smith.
OnDeck’s IPO news comes just a few months after the IPO filing of peer-to-peer lender, Lending Club (another Finovate alum). This reflects both a continued strong investment pace in fintech innovators in general, as well as a particular passion for alternative lenders. OnDeck earned the investment dollars of a number of major fintech-savvy venture capitalist firms and individuals such as PayPal co-founder Peter Thiel and former American Express CEO, James Robinson.
What are people saying about the IPO? At places hardcore investment websites like Seeking Alpha
, the questions are all about the sustainability of growth and the potential for profitability in the near-term. Over at Inc.
, Jeremy Quittner sees challenges and advantages for OnDeck as opposite sides of the same coin, considering the company’s “balance sheet lender” business model as a “risk” and its capacity for generating significant income from interest a “reward.”
OnDeck recently presented at FinDEVr San Francisco 2014
, introducing its frictionless, extensible, and powerful API. The company announced
its plan to partner with Worldpay in August, and reported
in June that it’s small business lending platform had a $3.4 billion, 22,000 job impact on the economy. In March, OnDeck raised $77 million in a round led by Tiger Capital. The New York-based company was founded in 2007 and was last on the Finovate stage for the spring 2012 show
in San Francisco.