BlackRock Investing $1 Billion in LendingClub’s Marketplace

Investment management giant BlackRock has inked a new agreement with financial services company LendingClub.

This arrangement, announced in a news release Tuesday (Aug.) will see funds and accounts managed by BlackRock advisors invest up to $1 billion through LendingClub’s marketplace programs through next year.

Clarke Roberts, senior vice president and general manager for Marketplace at LendingClub, called the partnership “an exciting step forward” for his company.

“It also validates the strength of our underwriting, the effectiveness of our marketplace programs, and the trust we’ve earned as a counterparty of choice in this asset class,” Roberts said in the release. “We want to thank BlackRock for their collaboration and execution, and we look forward to growing this partnership over time.”

This collaboration comes on the heels of BlackRock’s first transaction of $100 million under LendingClub’s new LENDR (LendingClub Rated Notes) program, which closed in June. LENDR offers “multiple tranches, each with a credit rating from Fitch,” the release added.

Under the June transaction with BlackRock, all tranches were sold to funds and accounts managed by BlackRock. In all, LendingClub has sold close to $6 billion in loans through its structured certificates programs since their launch in 2023.

PYMNTS spoke in June with LendingClub CEO Scott Sanborn, who argued that as high-income Americans struggle with debt, the solution is rewarding people for using the money they actually have rather than extending more credit.

“We’re saying that if rewards are important to you, that’s great, so let’s reward you for good behavior,” Sanborn told PYMNTS CEO Karen Webster as LendingClub introduced its LevelUp Checking service.

That program offers customers 2% cash back for on-time loan payments made from the account and 1% cash back when using the associated debit card for qualifying purchases.

As that report noted, the reliance on credit is not confined to lower-income brackets, as illustrated by LendingClub’s target customer for LevelUp Checking. These are people individuals with a high FICO score, typically around 725, and a higher-than-average individual income, somewhere in the range of $125,000 to $130,000.

“These consumers often have enough money to afford things but lack the immediate cash to pay for them outright,” Sanborn said, making them more likely to carry larger-than-average car loans, student loans, mortgages and significant credit card debt.

During an earnings call last week, Sanborn said that LevelUp Checking had driven a six-fold increase in the number of checking accounts opened each day since its launch in June.