OnDeck Shares Lose More Than 30% Of Their Value in a Week
March 11, 2020Shares of OnDeck have suffered in the last week as the market has seen a dramatic pullback. Shares have traded as low as $2.17 on Wednesday, down 12% from the previous day. The company’s market capitalization is at $128.2M million, down from its 2014 IPO value of $1.32 billion.
OnDeck, Lending Club Shares Battered By Market Turbulence
March 9, 2020The collateral damage of market panic led to all-time low share prices for online lending companies OnDeck and LendingClub on Monday. By noon, OnDeck was down 7.5% on the day at $2.55 (the low was $2.47) and LendingClub was down 5% at $9.62 (the low was $9.26).
Online lender Elevate also hit a new all-time low of $2.50.
OnDeck Repurchased 3.2M Shares, Reports $8.7M Q3 Profit
October 24, 2019
OnDeck announced this morning that it has repurchased 3.2M of its own shares for $11M since making its buyback announcement on July 29th. The company intends to repurchase another $39M worth.
OnDeck was profitable in Q3, reporting a net income of $8.7M on originations of $629M. Although that was an increase over the previous quarter, the year-over-year decline was said to be a reflection of “tightening underwriting criteria and market dynamics.”
The average term loan was for $56,000 with an average maturity of 13 months. The company’s line of credit program is growing and now accounts for 21% of the company’s total loans and finance receivables at quarter-end, up 15% from last year.
“OnDeck expects the current operating environment to extend into 2020 with increased profitability,” their quarterly report said.
Chase Ends Partnership With OnDeck, OnDeck Stock Tanks On Bucket of Mixed News
July 29, 2019
The market didn’t take too kindly to OnDeck’s Q2 earnings announcement on Monday. The stock price set a new all time intraday low of $3.01, down 24% from Friday’s close.
First, JPM Chase ended their partnership with OnDeck, the company said, bringing a 3-year relationship to a close. “We can’t speak for Chase and their change in priorities,” OnDeck CEO Noah Breslow said during the Q&A with analysts. “I don’t think it was specific to us.”
It was subsequently revealed that the relationship was never a significant moneymaker for their business to begin with. “On a standalone basis, it was a positive contributor,” the company said, but that it was “not a contributor to the bottom line profit.”
Breslow called the Chase deal a one-off that had some costs involved with it, but that they were optimistic about other deals with banks through their subsidiary ODX. “We do believe the drivers of this are not some fundamental readout on the ODX model,” he explained. “Again, we had a product that performs very well from an underwriting perspective. Customers loved it. We can’t speculate on why Chase made this particular decision. We just know it was specific to them.”
OnDeck also announced plans to pursue a bank charter and believed that the timing was right. Although they were “far along in [their] thinking,” they had not actually applied for a charter and they left the door open to possibly acquiring a chartered bank to achieve that goal. “I think the next logical milestone would be to look for some kind of either application for such a charter, but we’re not prepared to talk about a timeframe over which that would occur,” the company said.
Originations shrank to $592M, down from $636M in the previous quarter. “We do expect a return to sequential originations growth in the third quarter,” Breslow said.
The company also plans to buy back up to $50 million worth of stock to boost the share price.
OnDeck Taps Bank Veteran to Lead ODX Sales and Strategy
July 23, 2019
NEW YORK – OnDeck® (NYSE: ONDK), the leader in online lending for small business, today announced the appointment of Lonnie Hayes as the Head of Sales and Strategy for ODX, a wholly owned subsidiary of OnDeck that assists banks with streamlining and digitizing small business credit origination.
Mr. Hayes brings more than thirty years of experience to his new role. He most recently served as Executive Vice President of Small Business for BBVA USA, where he established the organization’s U.S. strategy to serve businesses with less than $10 million in annual revenues. At BBVA USA, Mr. Hayes oversaw product development, digital and sales operations, as well as leading the bank’s nationally recognized Small Business Administration (SBA) lending unit.
“Lonnie’s proven track record building and managing high-growth sales organizations and programs will be crucial as we continue to address the market from banks seeking enhanced digital lending capabilities,” said Brian Geary, President, ODX. “Lonnie will be a tremendous asset to our team as we engage financial institutions to help them accelerate their ability to serve small businesses.”
“I am excited to join ODX, the pioneer in digitizing and speeding the online lending experience for banks,” said Lonnie Hayes, Head of Sales and Strategy, ODX. “I hope to bring a banker’s perspective to our partnership efforts and look forward to collaborating with bank colleagues old and new, to strengthen the economics of small business lending while dramatically improving the customer experience for borrowers.”
ODX operates as a subsidiary of OnDeck and offers a combination of software, analytic insights, and professional services to help banks reinvent their small business lending process. At the core of the ODX solution is a modular, scalable, and reliable SaaS platform that allows banks to either create a fully end-to-end digital experience for their customers or to select certain components for specific product functions. An ODX-powered bank platform experience can enable a small business customer to apply for financing from their bank online, receive immediate decisions, and obtain funding in as fast as 24 hours.
About OnDeck
OnDeck (NYSE: ONDK) is the proven leader in transparent and responsible online lending to small business. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. The company also offers bank clients a comprehensive technology and services platform that facilitates online lending to small business customers through ODX, a wholly-owned subsidiary. OnDeck has provided over $11 billion in loans to customers in 700 different industries across the United States, Canada and Australia. The company has an A+ rating with the Better Business Bureau and is rated 5 stars by Trustpilot. For more information, visit www.ondeck.com.
Media Contact:
Jim Larkin
OnDeck
jlarkin@ondeck.com
P: 203-526-7457
Investor Contact:
Stephen Klimas
OnDeck
sklimas@ondeck.com
P: (646) 668-3582
OnDeck, the OnDeck logo, OnDeck Score and OnDeck Marketplace are trademarks of On Deck Capital, Inc.
OnDeck Canada, Credit Union Announce Partnership
July 11, 2019Today sees the partnership of OnDeck Canada and Coast Capital Savings, the first collaboration of its kind in Canada, being between an online lending company and a federal credit union.
Beginning this month, small business members of Coast Capital will be able to apply for term loan financing from OnDeck Canada of up to CAD$250,000 online, in branch, and via the Coast Capital Contact Centre. And as a perk of partnering with an alternative financing company, Coast Capital members will benefit from the fast turnaround times for approvals and funds being made available that are typical of the industry, with waits being as short as one day.
The move comes as OnDeck Canada is expanding to Quebec, paralleling Coast Capital’s efforts to spread across the nation, beyond its home of British Colombia. Both parties appear to be approaching the partnership with similar visions of where it will take them, with Tiffany Kayar, the OnDeck Canada Communications Manager, explaining that OnDeck is able to further help fund those small businesses who have been historically underserved by alternative financing, and Coast Capital will benefit from a greater national presence.
It is one more notch on OnDeck’s belt of partnerships, coming after the online lender linked with JPMorgan Chase in 2017 and PNC Financial Services Group last year to extend loans to businesses.
And for Coast Capital, which has the largest membership base of any credit union in Canada, it is a development that is consistent with their history of innovation. Having offered Canada’s first free checking account from a full-service financial institution and Help Extras®, which further assist members with investing, this opening up of funding channels to small business owners further cements Coast Capital’s position as a unique non-bank choice for finance management.
With small businesses comprising 98% of Canadian businesses, this partnership is hoping to provide support for such a large sector of the country’s economy. Saying in a press release that “As the proven leader in online small business lending, OnDeck Canada is delighted to partner with Coast Capital to offer online financing to its small business customers, ensuring that their unique and ever-evolving needs are met faster than ever with the power of automation and a world class digitized customer experience,” Neil Wechsler, CEO of OnDeck Canada, is confident that the synergy between OnDeck’s tech and Coast Capital’s membership will benefit the Canadian business community. Just as Derek Turner, Head of Small Business at Coast Capital, is sure that the partnership will “deliver the Coast Capital experience that so many members already enjoy, to even more people across Canada.”
OnDeck Slips To #3 in Tight Pack of Top Small Business Lenders
May 3, 2019
With most 2019 Q1 earnings in for public companies, the industry’s biggest lenders are off to the races. Square reported on Wednesday that Square Capital, its business lending arm, originated $508 million in loans in the first quarter of the year. Meanwhile, OnDeck originated $636 million this quarter, according to its earnings report released yesterday. Kabbage, which is not a public company, has been trailing very closely behind OnDeck for the last few years but someone familiar with the company said that Kabbage’s originations in the first quarter of this year surpassed OnDeck’s.
Then there is PayPal, which has not released official origination numbers for 2019 Q1. But earlier statements from PayPal that they had surpassed a billion dollars in quarterly small business funding in 2018 (already more than OnDeck), would put it in the #1 slot for originations. Additionally, a comment made by PayPal CEO Dan Schulman during the company’s earnings call last week implied that its Q1 2019 earnings are again over a billion dollars.
PayPal’s estimated originations number represents its US and international originations, including their business financing products available in the UK, Australia, Germany and Mexico. Likewise, OnDeck’s number represents originations from the US along with its smaller markets in Australia and Canada.
Square Capital operates exclusively in the US, so its originations number is US-only. And Kabbage’s undisclosed estimated originations number represents purely US originations.
| Company Name | 2019 Q1 Funding Volume |
| PayPal | $1,000,000,000+ |
| Kabbage | $650,000,000* |
| OnDeck | $636,000,000 |
| Square | $508,000,000 |
OnDeck Originations Slide in First Quarter
May 2, 2019OnDeck’s originations dipped in the first quarter of this year to $636 million, down from $658 million in the previous quarter.
“We made some adjustments to credit policy mid-quarter to pull back in certain areas and our funding advisor channel volume decreased sequentially as a result,” said OnDeck CEO Noah Breslow.
In other words, OnDeck has tightened its credit box.
“If you tighten [your credit box] and your competitors stay exactly the same, on the margin, your funnel is going to deteriorate a little bit because you’re not making as aggressive offers as you were before,” Breslow said in response to a question on this morning’s earnings call.
But he also said that OnDeck has a lot of historical data on its portfolio that tells them that this tightening for now is a wise decision.
“And we’re not making a seismic shift in who we’re targeting or what we’re trying to do,” Breslow said.
When asked by an analyst on the conference call if competition in the space is now more intense, he agreed that it is.
“But it’s broad based, not localized to any one competitor,” Breslow said. “There are larger players in the market that are getting a little more mature. Some of them are improving their access to capital as well.”
Kabbage likely sees itself as a primary competitor and not just part of “broad based” competition. After all, it originated $2 billion last year, compared to OnDeck’s $2.48 billion.
“The small players actually have pretty good access to capital too,” Breslow said on the call. “So any single one of them is not that big, but if you put them all together, they’re equivalently sized to another OnDeck. So that’s something we watch as well.”
While total originations dropped for OnDeck, Breslow said that the company’s line of credit volume was at an all time high, accounting for $150 million. Also, 43% of volume for the first quarter of 2019 came from OnDeck’s direct channel. Yet the company continues to build out its partnerships.
“Given the attractive customer acquisition costs in the strategic partner channel…adding new partnerships remains a focus,” Breslow said.
Breslow said OnDeck expects to return to quarterly growth in the second half of this year.
