LendingClub and Pagaya acquire Tally's credit tech

SAN FRANCISCO & NEW YORK - LendingClub Corporation (NYSE: NYSE:LC) and Pagaya (NASDAQ:PGY) Technologies LTD (NASDAQ: PGY) have announced a partnership to acquire the intellectual property of Tally Technologies, Inc., a company known for its credit card management solutions. The acquisition is expected to enhance LendingClub's member engagement platform and expand Pagaya's suite of B2B offerings.

LendingClub, which operates a leading digital marketplace bank in the U.S., aims to integrate Tally's technology to provide its 5 million members with tools to manage credit card debt more effectively. The technology is designed to help users automate payments and reduce interest costs. "With credit card debt and interest rates at historic highs, the need for better tools and solutions has never been greater," said LendingClub CEO, Scott Sanborn.

Pagaya, an AI-driven financial technology company, plans to incorporate Tally's product into its B2B credit management solutions. Pagaya's President, Sanjiv Das, noted that integrating Tally into their offerings will enhance the value provided to their 31 lending partners. The move aligns with Pagaya's commitment to delivering tailored solutions for its partners and their customers.

Tally's operations ceased in August 2024, and its assets were made available for purchase. The acquisition by LendingClub and Pagaya ensures that Tally's innovations will continue to serve consumers in the future.

Both companies have a history of using advanced data analytics and machine learning to improve financial services. LendingClub has facilitated over $90 billion in loans since its inception, and Pagaya manages a network that includes 120 institutional investors.

The financial terms of the acquisition were not disclosed in the press release statement. As the financial industry continues to evolve, partnerships like this one between LendingClub and Pagaya are aimed at providing consumers with more sophisticated tools to manage their finances.

In other recent news, Pagaya Technologies has been the subject of multiple analyst revisions and executive transitions. B.Riley reduced its price target for Pagaya Tech from $48 to $36, maintaining a Buy rating. This adjustment was made in light of the company's expected decrease in cost of capital and funding. Furthermore, Canaccord Genuity also decreased its price target for the company from $42 to $32, maintaining a Buy rating, due to a delay in the HARMONY study.

Pagaya Technologies reported strong Q2 2024 earnings, with a network volume of $2.3 billion and a record $50 million in adjusted EBITDA. Despite a net loss of $75 million due to share-based compensation and fair value adjustments, the company raised its full-year outlook. Pagaya also signed a $1 billion forward flow agreement with Castlelake and achieved a AAA rating on its personal loan ABS program.

In terms of executive transitions, Scott Bower stepped down as the principal accounting officer, with Nam Woo Kim taking over Bower's responsibilities on an interim basis. The company also appointed Rajinder Singh, a veteran in the banking and financial services industry, as its new Chief Risk Officer. These recent developments reflect the ongoing strategic advancements and robust financial health within Pagaya Technologies.

InvestingPro Insights

As Pagaya Technologies LTD (NASDAQ: PGY) embarks on this strategic acquisition with LendingClub, investors might be curious about the company's financial health and market position. According to InvestingPro data, Pagaya's market capitalization stands at $728.21 million, reflecting its position in the fintech space.

The company's revenue growth is noteworthy, with a 27.98% increase in quarterly revenue as of Q2 2024. This robust growth aligns well with Pagaya's expansion strategy, including the recent Tally acquisition. Additionally, the company's gross profit margin of 40.16% for the last twelve months suggests a solid foundation for profitability as it scales its operations.

InvestingPro Tips highlight that Pagaya is trading at a low revenue valuation multiple, which could be of interest to value-oriented investors. This metric, combined with the fact that analysts predict the company will be profitable this year, paints a potentially optimistic picture for Pagaya's financial trajectory.

It's worth noting that Pagaya's stock price movements have been quite volatile, which is not uncommon for growth-stage fintech companies. This volatility underscores the importance of the company's strategic moves, such as the Tally acquisition, in stabilizing and enhancing its market position.

For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 5 more InvestingPro Tips available for Pagaya Technologies, providing a deeper dive into the company's financial health and market prospects.

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