Providian

www.commercebank.com

We were more than a bit surprised to see Providian (San Francisco, CA; $14 billion; 8 million customers) pick up GetSmart for “only” $33 million. Traditionally that would be a handsome sum for a two-and a half-year old company that simply generates loan leads. However, in today’s market we expected an ecommerce pioneer which generated 458,000 loan leads from 8.1 million visitors in 1998, to be worth more as a public entity or in a sale to Intuit, Microsoft, or other Net high-flyers. The sales price of $33 million works out to $4 per 1998 visitor, or $72 per loan application. Compare that to $20,000 per customer valuation currently afforded Net.B@nk.

Providian already has a couple of nice features
on its Web including instant Visa credit card approval.

Providian is shaping up to be a player on the Web. In January, the company purchased the 120,000 account, $180 million WebCard portfolio from H&R Block. Terms of that deal were not disclosed. WebCard’s predecessor, the Conductor card accessible on CompuServe, was one of the very first online financial products. Providian has also been quietly selling deposit products on its own Web site, having built a $100 million deposit base with little marketing.

Apparently GetSmart will function as a stand-alone unit hoping to continue its existing relationships with more than 100 lenders, who may be less inclined to purchase leads from a lending competitor. GetSmart founder Bill Fisher will leave the company to start a new venture.
Contact: Providian SVP James Rowe has been named CEO of GetSmart.com and head of the e-commerce division, (415) 543-0404.