Online Lenders Facing Marketing War

Enthusiasm around online lending has created a handful of companies with multi-billion dollar valuations and an even bigger group of up-and-comers such as Upstart and SoFi. But competition among more well-funded players is driving up the costs of luring new customers, clouding the long-term prospects for some in the industry.

Rising customer acquisition costs are a perpetual concern for any growing company, felling startups from on demand cleaning services to e-commerce sites. But it’s felt acutely among the financial technology companies, many of which are selling a product—loans—that doesn’t differ much from one company to the next.