LendingClub, a fintech company pioneering in digital lending, bought Radius Bancorp, a leading Boston-based online bank. LendingClub has pioneered in the personal loan space, making itself online and is now buying a US bank to give it access to cheaper and stable sources of funding, according to CNBC.

LendingClub is set to pay $185 million in cash and stock. Currently, Radius Bancorp has assets worth $1.4 billion. This deal is a first of its kind wherein a fintech has acquired a bank. After observing the current fintech market right from Robinhood to Square, all fintech have applied the best of the techniques to become a bank as it would provide a better profit margin and ability to issue new banking related products.

Recently Varo Money got FDIC approval for the national bank charter, aiding it to accept consumer deposits. LendingClub, one of the biggest providers for personal loans in the US, has been a leader focused on marketplace lending or matching borrowers with lenders.  The company had the biggest tech IPO in the US for the year 2014, as the valuation soared to $8.5 billion. But in 2016, LendingClub founder Renaud Laplanche was ousted from the company amid allegations of irregularities in loan practices.

According to CNN, the company is looking to offer new products to its clients along with eliminating or reducing the use of institute-based funding sources and diversify the earnings. This combination of a leading loan provider with a digital deposit gatherer will be pushing the business toward better and improved directions. The new deal will save $40 million a year in back fees and funding costs and will allow the company to earn from the spread of loans, which are currently hanging in their balance sheet.

The transaction will take 12–15 months and will breakeven for LendingClub after two years. JPMorgan Chase had advised the firm on the lending steps, with an effort to become a regulated bank.