South Korean insurer buys 4.1% stake in lending Club for $66m


South Korea’s Hanwha Life Insurance has acquired a 4.1% stake in troubled peer-to-peer lending firm Lending Club.

The insurer paid $66.3m for the stake – a price that suggest the firm believes the US lender’s stock is undervalued.

Lending Club was valued at $5.4bn in its 2014 IPO but has seen its value fall following the departure of CEO Renaud Laplanche as a result of an internal probe into a loan sale.

It’s currently valued at $2.1bn.

In addition to the investment Hanwha Life Insurance is forming a strategic partnership with the company.

Lending Club claims to have facilitated more than $21bn in loans and is expected to report its Q3 2016 earnings this month.

The earnings call follows a disappointing second quarter for the company that saw its losses grow to $81.4m.

Hanwha Life Insurance is a part of the Hanwha Group conglomerate and the investment comes as a part of a group-wide fintech initiative.

The insurer has recently forged a series of partnerships with foreign fintech firms, such as China’s

Hanwha Life Insurance said it has no immediate plans to buy any more stock in LendingClub but expects to make a profit on the shares in the long term as well as gain an insight into the peer-to-peer lending space.

Copyright © 2016 FINTECH GLOBAL

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