LendingClub, biggest peer to Sweden listed P2P lending provider TrustBuddy, has raised about USD 865.5 million from selling 57.7 million shares in its IPO. Stock is expected to start trading today, Thursday December 11th.
The valuation of the Lending Club IPO brutally shows just how undervalued TrustBuddy is in comparison, since the European counterpart is trading at significantly lower multiples. At a valuation of USD 5.4bn, Lending Club will be trading at 30.5x 12-months trailing revenues. Looking at the same timeframe, i.e. 12 months ended September 30, 2014, TrustBuddy reported revenues of SEK 106.4m. TrustBuddy’s current market cap is around SEK 400m. This implies a multiple of 3.8x. If we were to assign the same multiple to TrustBuddy as to Lending Club, TrustBuddy’s market cap should be SEK 3245m, or SEK 9.80 share. This would imply an upside of 7.8x compared to today’s levels. Probably that is one of the reasons why insiders have been heavily buying shares ever since the summer.