PRUNING TIME: Fintech innovator LendingTree recharges after rivals stole its thunder.

• Author: MacMillan, Mike

Not long ago, the stars seemed to be aligning for LendingTree. The titanic shift to more online purchases of homes, cars and insurance policies would surely propel digital ad spending to benefit the business that CEO Doug Lebda had built with tenacity since 1996.

By 2017, after years of marketing spending topping $2 billion, LendingTree's "When banks compete, you win" tagline was part of the online financial marketplace's lexicon. LendingTree's brand awareness ranked at 69% among consumers, not far behind Chases 77%, and dwarfed other financial services startups such as Zillow, Rocket Mortgage and Bankrate, company research showed.

Investors bought the story, pushing the market value of the Charlotte-based financial services platform company to as much as $5 billion in mid-2019. Four years later, the shift online in financial services continues at a rapid clip, but the shiny promise of LendingTree has lost some luster.

It has laid off about a fifth of its staff in the past year. Revenue tripled between 2016 and 2019, but has flatlined since then. Including charge-offs, the company has reported a cumulative $ 150 million net loss over the last four years. The market cap was about $300 million in mid-April.

LendingTree's history is that of a survivor, however. Lebda, a former Ironman competitor, has shown remarkable staying power. The company is buckling down and testing new strategies. The company last year hired "Saturday Night Live" personality Molly Shannon to front a marketing campaign in support of its newest product, the Win Card. She will appear in some new ads this year.

Win Card is LendingTree's first branded credit card. The goal is to encourage a deeper relationship between customers and the company by rewarding responsible borrowing with benefits linked to the card. For example, a 20-point increase in one's credit score prompts an automatic increase in the borrowing limit.

Initial offers went to members of MyLendingTree, an opt-in service that provides free credit scores and credit monitoring to about 25 million people. Membership in the service has more than doubled in the past five years. "It's our version of Amazon Prime," Lebda says.

"We want to be a digital ally to the consumer," says J.D. Moriarty, the company's president of marketplace and chief operating officer. "Win Card is the start of that."

The launch follows a challenging year for consumer lenders and people trying to buy homes, cars and insurance. Rising interest rates spiked mortgage originations, and put a damper on refinancings, both big businesses for LendingTree. Insurance, another big line, was hit by inflation as rising prices for used cars and car repairs caused insurers to pull back. The cost of personal loans rose. "Our business was tested in 2022, in perhaps one of the most difficult operating environments we have faced in our history as a public company," according to LendingTree s year-end letter to shareholders.

In 2022, the company reported a loss from continuing operations of $ 188 million, or $ 14.69 per share. That...