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I wrote a LinkedIn article almost 2 years ago about On Deck, the behemoth Wall St based online small business lender that announced they were expanding to Canada.   Click here to read

It was a tongue-in-cheek “Welcome to Canada” article where I sarcastically marvelled at some of their stats like $60 million spent in marketing over the past 3 years and $40 million in technology over the same period. They also sponsored Minor League Baseball which is super cool.

In all seriousness, as a much smaller online lender, we were excited about their move into Canada. If they would spend marketing dollars recklessly in Canada like they’ve demonstrated south of the border (and they have) it would heighten the awareness of online small business loans industry in general and everyone in the industry would benefit. Since their arrival, our business has doubled in volume. Of course not all the credit for our growth goes to On Deck but Google Analytics tell us thousands of visitors have stumbled upon the Company Capital website while searching for “On Deck.”  (If you’re familiar with PPC you’ll know how this works)

So, in 2014, the year they arrived in Canada, they lost $18.7 million.

From the 2014 Annual report ….

We have a history of losses and may not achieve consistent profitability in the future.

We generated net losses of $16.8 million, $24.4 million and $18.7 million in 2012, 2013 and 2014, respectively. As of December 31, 2014, we had an accumulated deficit of $127.1 million. We will need to generate and sustain increased revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability. We intend to continue to expend significant funds to expand our marketing and sales operations and technology and analytics team, increase our customer service and general loan servicing capabilities, meet the increased compliance requirements associated with our transition to and operation as a public company, lease additional space for our growing employee base, upgrade our data center infrastructure and expand into new markets.

It’s worth re-stating because it’s so incredible


So in other words they’re never going to make any money. So what do they decide to do? Spend more on marketing, sales, customer service, technology, lease fancy new offices and cross their fingers. What do they care? It’s a publicly traded company, it’s not their money. Its’s OPM (other peoples money).

So that was 2014. Things must be much better now right? They released their earnings report for 2016 last week…..

Online lender On Deck tumbles on record loss

losses (in millions) since 2007
2012 2013 2014 2015 2016 accumulated
 $16.8  $24.4  $18.7  $2.2 $85.5 $215 million


They announced an $85 million loss for 2016. It’s the biggest loss in the 10 year history of the Company. They have accumulated losses of $215 million since day one.

Hmm…it looks like crossing their fingers and spending their way to profitability didn’t turn out as planned – shocking.

A company spokesman said “the company is taking several steps to slash costs by $20 million a year, including cutting 11 percent of its staff and reducing marketing and technology expenses.”

That’s great – so next year they’ll only lose $60 million? Remember what they said in 2014…we may not achieve consistent profitability in the future. At least they got that right.

Personally I don’t really care. I feel sorry for the employees – I’ve worked for a publicly traded company that went through some brutal times – but I don’t know anyone from that company or even anyone from New York City.

So why should you care?

If you’re a Canadian small business looking for financing would you rather deal with a New York based publicly traded company with out of control spending and losses or a 100% Canadian owned and operated, privately held company that is self-funded and profitable.

We thought so.

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