OnDeck Reports Record Origination Volume in Third Quarter Report

Today, OnDeck released its third quarter earnings report, which revealed origination volume of $648 million, a record high for the company and an increase of 22% from a year ago. OnDeck recently passed the $10 billion mark in total originations. The average term loan size of $56,000 remained largely unchanged from last quarter.

“Lending volume from our strategic funding advisor and referral partner channels continues to build, reflecting growth at our network of partners and alignment between the quality of applications coming in and our risk appetite,” said OnDeck CEO Noah Breslow, “…[and] we were pleased that we saw increased website traffic leading to higher applications.”

Gross revenue increased to $103 million, up 8% from the previous quarter and up 23% from a year ago. This was driven by higher Interest income due to portfolio growth and higher yields, according to the company earnings statement.

In the middle of October, OnDeck announced the creation of ODX, which will focus on providing an online lending platform to banks to help them serve their clients more efficiently. At the end of the month, and coinciding with the Money 20/20 conference, OnDeck announced that PNC Bank was ODX’s first customer. ODX grew out of a successful partnership that OnDeck has developed with Chase bank, starting in 2016.       

In response to a question after this morning’s earnings call, Breslow said that about $10 million is being spent on startup costs and infrastructure for ODX, and that the revenue model will be slightly different depending on the bank client.

“The revenue model [for ODX] does differ a bit between banks,” Breslow said. “But generally speaking, there is a technology licensing component, there is a professional services or customization component and then there is a volume-based component.”