OnDeck Capital, the online peer-to-peer small business lender, has made its debut on the public market today (17 December), pricing an initial public offering (IPO) of 10,000,000 shares of common stock at $20 per share, above the expected $16-$18 range. The shares began trading on The New York Stock Exchange under the ticker symbol “ONDK”.
OnDeck has granted the underwriters a 30-day option to purchase up to an additional 1,500,000 shares to cover over-allotments, if any.
OnDeck’s IPO follows that of Lending Club, another online lender, which priced its shares at $15 last Thursday (11 December) and has taken off since. Analysts and industry observers speculate that other alternative lenders, like Prosper, SoFi and Funding Circle could also list.
Morgan Stanley and BofA Merrill Lynch acted as joint lead book-running managers and as representatives of the underwriters for the OnDeck offering. JPMorgan Securities, Deutsche Bank and Jefferies were book-running managers, while Raymond James & Associates, Stifel, Nicolaus & Company and Needham & Company were co-managers on the offering.
OnDeck Capital is an online platform for small business lending. The company seeks to make it more efficient and convenient for small businesses to access capital. The company has a proprietary technology and analytics platform that aggregates and analyzes thousands of data points from many sources to assess the creditworthiness of small businesses. Small businesses can apply for a line of credit and the lender, using its proprietary OnDeck Score, can make a funding decision immediately.
The firm has originated about $1.7 billion in loans and collected 4.4 million customer payments since its founding in 2007. Loan originations increased at a compound annual growth rate of 127 percent between 2011 and 2013 and had a year-over-year growth rate of 171 percent for the nine months ended 30 September.