Former LendingClub CEO Renaud Laplanche launches new online lender

Thu Apr 6, 2017 6:49pm EDT
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By Anna Irrera

NEW YORK (Reuters) - Renaud Laplanche, who abruptly stepped down as chief executive officer of LendingCLub Corp (LC.N: Quote) in May, has launched a new online lender called Upgrade, the company said on Thursday.

San Francisco-based Upgrade has raised $60 million in equity and convertible notes from a large group of U.S. investors including Union Square Ventures, Ribbit Capital, Vy Capital and Silicon Valley Bank, the startup said.

It said investors also included large Chinese lender CreditEase and Noah Holdings (NOAH.N: Quote), an investment management firm.

Laplanche, who founded and took LendingClub public, sent shockwaves through the emerging online lending industry with his resignation last year, after the company acknowledged a series of loan malpractices.

LendingClub, which runs a website where consumers can apply for loans funded by individual or institutional investors, said it had altered documentation when selling $22 million in loans to Jefferies Group. The loans were later repurchased by the online lender.

An internal probe also revealed that Laplanche and his family had taken out 32 loans on the platform in December 2009 to boost the company's volumes just four months prior to closing a round of venture capital funding.

Laplanche is now making his comeback with the support of LendingClub's venture capital backer Union Square Ventures.

"We are thrilled to be backing Renaud again, after having worked alongside him at Lending Club for many years," said Fred Wilson, managing partner at Union Square Ventures in a statement.   Continued...

Renaud Laplanche speaks during an interview with CNBC on the floor of the New York Stock Exchange in New York, United States on December 11, 2014.  REUTERS/Brendan McDermid/File Photo