Often characterized as the industry’s biggest cheerleader, Peter Renton has become synonymous with marketplace lending. As the founder of Lend Academy Media, the LendIt Conference, and more recently Lend Academy Investments, Renton has served as a catalyst for the industry providing unprecedented insight and resources through his multiple platforms. Despite Renton’s unwavering commitment to marketplace lending, his path to success was not always as straightforward and obvious as it seems in hindsight.
It all started back in 2008. Renton had recently sold his second printing business to a public company. While the enterprise had been successful, he was not particularly passionate about the printing industry and eager to try something different. Given that Renton was married and had two young children, he decided that his next venture would be an online business that he could manage from his home in Denver. With that in mind, he started looking at online businesses for sale.
Renton was admittedly “all over the place” and remarkably broad in his search criteria. In fact, one site that he very seriously considered purchasing was an online retailer that exclusively sold bamboo clothing—a far cry from marketplace lending. In a parallel universe, Renton could be an eco-conscious clothing mogul. However, as fate would have it, Renton happened across a magazine article about Prosper around the same time. “That article changed my life,” said Renton. “I ripped the page out and immediately tried to invest. However, Prosper was in their quiet period at that moment.
“I had recently sold my business, had a whole bunch of cash, and interest rates were at a record low following the financial crisis. I thought that the returns looked attractive on Prosper and I liked the idea of bypassing banks and connecting directly with borrowers.” Renton ended up investing with Lending Club at that point in time and eventually Prosper. His confidence in the industry grew stronger as he was seeing increasingly good returns and more robust platforms. Renton was fortunate to find a site called SocialLending.net for sale from someone who is now an employee of Lending Club. Renton’s full price offer was accepted and a business was born. “What he doesn’t realize is that I would have paid him double,” joked Renton.
While Renton was fully committed to the site, he spent the following year learning more about the space, and laying the groundwork for what eventually would be rebranded as Lend Academy. “It didn’t feel like a job, but I have never worked so hard in my life.” Equipped with his new platform, Renton was now faced with the challenge of building his audience and growing his business from the ground up. His comprehensive approach and determination are good reminders of how the best leaders are proficient in making their own luck. It is often said that luck is what happens when opportunity meets preparation. In Renton’s case, and most successful entrepreneurs, it would be pertinent to add persistence to the list.
“I literally read everything about the industry. I also regularly produced content, commented on articles from other online publications, and did whatever I could as often as I could to get my name out there.” Given that the industry was still in its relative infancy, Renton was able to gain complete access to management of most companies and, almost by default, effectively developed strong relationships that would serve him well as his company and the industry began to scale. With regard to the growth of the industry, Renton’s tenacity began to pay off as traffic flooded into the site. On average, Lend Academy was doubling its audience year over year and quickly established itself as the preeminent resource for the online lending industry with Renton firmly in the center. As the industry grew, so did Lend Academy and Renton’s influence. While a rising tide may lift all boats, it is undeniable that Renton was more than doing his part in making the waves.
In January 2013 Renton was approached with an idea: to launch a conference dedicated to the burgeoning marketplace lending industry. While the event was conceived as the physical embodiment of everything Renton was doing with Lend Academy in terms of education and awareness, it would also provide a considerable networking opportunity for a diverse group of industry participants. Renton knew that they needed buy-in from Lending Club and Prosper in order to be viewed as credible. Successfully leveraging the relationships he had developed over the years, he gained support from both companies and the first global marketplace lending conference was born. The inaugural LendIt conference was held in New York in June 2013 and impressively sold out of all 350 tickets. “I couldn’t believe it,” said Renton, “we had to turn away 75 people!” Building on this success, Renton and his partners launched additional conferences in China and San Francisco and are bringing LendIt to Europe next month in London — a logical progression given that the industry was essentially created in the UK.
More recently, Renton established Lend Academy Investments, with two of his LendIt partners, Bo Brustkern and Jason Jones. His latest venture seeks to ease the process of investing in marketplace lending across leading platforms by offering investment solutions to both accredited and non-accredited investors. “The idea actually came from our readers. They wanted to invest in the space but didn’t want to manage it themselves.” Given Renton’s experience covering lending and personally investing in the space, he felt that he and his partners could add significant value through this new platform and that it was a natural extension of the current business. While the applications of Renton’s knowledge and experience have evolved over time, education and advisement are still paramount to his vision and at the core of his growing enterprise as is evident with Lend Academy Investments.
With all three business verticals flourishing, Renton now has his sights set on the future. Discussing the outlook for next year and beyond, Renton believes that we’re going to see the first mutual fund in this space launch by the end of 2015. “If you look at the stock market, the vast majority of people are investing through mutual funds. Also, the U.S. has the mostly highly developed mutual fund marketplace in the world. I’m not sure who’s going to do it but I’m confident that most investors in the future will access this growing asset class through a fund.” To this point, Renton also mentioned that establishing a secondary market is becoming increasingly important in the industry to provide liquidity that doesn’t currently exist.
Renton also shared his thoughts on promising new platforms in the space that stood out from the crowd. “Upstart is a perfect example of someone who is not just a ‘me too’ player and who is extending the market. While they have some overlap with Lending Club and Prosper, they are underwriting in a way that is totally new.” Upstart is a lending platform that looks beyond credit scores and incorporates data like academic performance and employment history to offer better loans to recent graduates. “It’s definitely a company to watch,” says Renton.
Peering a little further down the road, Renton sees a forthcoming consolidation as the asset class matures. “Big companies will have no problem weathering the storm and many of the niche players will either be gobbled up or fail. Having a really strong credit team is huge, especially in the event of a downturn.” Interestingly, Renton also mused that the largest player in marketplace lending 10 years from now might not have even launched yet. Nonetheless, he imagines that it will most likely be Lending Club, which he considers the “Google” of the space. “But,” he said, “you never know.”