Google Invests 125M for stake in Lending Club

[jesselne]

http://www.forbes.com/sites/parmyolson/2013/05/02/google-buys-stake-in-lending-club-valuing-peer-to-peer-lender-at-1-6-billion/

Very interesting move by Google. Will be interesting to see the products that these two companies collaborate to make. Will google's algorithms help speed up the "funding" process? Will you be able to buy things with credit through google wallet?

 

Edit: Clarified title

[Joet]

alright I'm going to start playing with this too. GooGle is simply too brilliant, I'm thinking this purchase more than validates the product

If net returns are truly ~12% or so, inclusive of defaults in the consumer lending biz [and these are achievable via places like prosper/LC/etc], I'm already FI. My projections normally only expect 2% or so above inflation.


hmm

[tooqk4u22]

It may validate LC a bit but Googles plans likely transcend the lending aspect.  One risk to LC is the regulatory environment as it gets bigger and impacts more people it will draw the attention of the CFPB, SEC and other regulators....and the investment by Google may increase this attention and the increased regulation/oversight may be benficial but will come with a lot of costs - go read a 10k for a bank.  (BTW - a $62.5mil investment is a rounding error for Google) 

[smedleyb]

It may validate LC a bit but Googles plans likely transcend the lending aspect.  One risk to LC is the regulatory environment as it gets bigger and impacts more people it will draw the attention of the CFPB, SEC and other regulators....and the investment by Google may increase this attention and the increased regulation/oversight may be benficial but will come with a lot of costs - go read a 10k for a bank.  (BTW - a $62.5mil investment is a rounding error for Google)

When you say "transcend the lending aspect" tooq, what do you have in mind?  Are you thinking this is a back door into the banking in general?  Should BAC and JP Morgan be slightly worried?

I just invested the last couple of grand I had sitting in my and my wife's LC accounts.  It's a nice validation and a solid sign this company will be around for a long time. 

[tooqk4u22]

It may validate LC a bit but Googles plans likely transcend the lending aspect.  One risk to LC is the regulatory environment as it gets bigger and impacts more people it will draw the attention of the CFPB, SEC and other regulators....and the investment by Google may increase this attention and the increased regulation/oversight may be benficial but will come with a lot of costs - go read a 10k for a bank.  (BTW - a $62.5mil investment is a rounding error for Google)

When you say "transcend the lending aspect" tooq, what do you have in mind?  Are you thinking this is a back door into the banking in general?  Should BAC and JP Morgan be slightly worried?

I just invested the last couple of grand I had sitting in my and my wife's LC accounts.  It's a nice validation and a solid sign this company will be around for a long time. 

I agree that Google validates it as well and it sees the lending operation as a revenue/profit source but Google is a data/search/ad revenue company so my view is that LC as an investment is a vehicle to add to that and provide the ability to plant ads in front of people who are already proven spenders.  I don't think that BAC or JPM should be worried at the moment and probably never because the regulatory scrutiny would be too much for google to handle and would open up other areas of thier business to such government intrusion.

In addition to the increased regulatory demands that LC will draw as it gets bigger, I also worry about quality/return dilution that may result when more potential lenders clamour to get in and drive down rates - we'll see.