February 3, 2017 / 11:05 PM / 6 months ago

MOVES-OnDeck Capital's chief operating officer to step down

2 Min Read

(Adds details on Hobson, company, sector)

By Anna Irrera

NEW YORK, Feb 3 (Reuters) - James Hobson, the chief operating officer of New York-based marketplace lender On Deck Capital Inc, will resign on March 15 to become chief executive of online insurance startup Attune, according to an OnDeck statement.

Hobson, who has been COO since June 2012, will remain at the small business lender for six weeks to assist with the transition, but no replacement will be named, a OnDeck spokesman said.

The responsibilities of the position will instead be filled by existing members of the company's executive team, the spokesman said.

Hobson's achievements during his time at the firm have included helping the company go public in 2014 and helping it secure a high-profile partnership with JP Morgan Chase & Co a year later.

His move comes as the marketplace lenders, which help consumers and small businesses secure loans from investors online, grapple with weaker demand from institutional investors who had helped boost their origination volumes.

OnDeck's shares have fallen around 77 percent since its initial public offering, to $5.15. Similarly, shares of consumer marketplace lender LendingClub Corp, whose founder and chief executive resigned abruptly in May, have plunged more than 74 percent since its IPO in 2014. They closed at $6.34 on Friday.

Despite the sector's growing pains, online lending services have piqued the interest of incumbent banks through their better use of automation to make lending cheaper and faster. Banks including JP Morgan, Banco Santander, Goldman Sachs Group Inc and Citigroup Inc have either partnered with startups or launched their own online lending services.

Hobson's job move also underscores the growing popularity of the online insurance sector. Startups in the so-called insurtech space have attracted more investment from venture capital firms over the past few years, as they seek to help modernize the $4.7 trillion global insurance market. (Editing by Matthew Lewis)

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