LendingTree Inc. announced more red ink late Wednesday — a net loss of almost $14.9 million for the fourth quarter and more than $66 million for the year.

The Charlotte, N.C., online lending exchange also announced that it had secured an additional $45 million in financing from several partners, including $14 million from Capital Z Partners Ltd., which invested $25 million in 1999.

The new cash, which was the fifth financing package for LendingTree over the past two years — including its February 2000 IPO — brought the total raised to nearly $110 million. The new funds are also notable for coming at a time when most dot-coms have been given the cold shoulder by investors — especially after burning through tens of millions in venture capital funding.

And like many of its dot-com brethren, LendingTree has yet to show a profit. In two years it has lost more than $90 million.

Nonetheless, Douglas Lebda, founder and chief executive of LendingTree, defended the company’s heavy financing, arguing that it takes a lot of time and money to build a successful lending exchange.

“As we talk to financial institutions, we have asked them to make big commitments to online lending with dedicated staff and resources,” he said. “That is an expensive proposition, but over the long term that is how we will become the dominant loan marketplace company.”

Under current company projections, LendingTree will reach profitability in the first quarter of 2002.

The $45 million package consists of $21 million raised through the sale of $13 million in convertible preferred stock and two lines of credit for $7.5 million. LendingTree said it also received a commitment for a $24 million line of common equity financing, arranged with Paul Revere Capital Partners Ltd. Another investor in the deal is Zions Bancorp.

Mr. Lebda said the lines of credit, as well as the $21 million to be gained from the preferred stock sale, would be enough to fund the company’s operations until it posts a profit; he said the company has $12.7 million in cash from last quarter.

Nick Karris, an Internet mortgage analyst at Lincoln, Mass.-based Gomez Advisors, said he was impressed that LendingTree could attract so much financing with what he called a “trust us, we’ll turn a profit later” approach.

“In this difficult capital environment, the ability to raise $45 million with a company that is still not operating profitably and probably won’t for the next few years is a very significant accomplishment,” he said. Mr. Karris said LendingTree looked “very promising” as a potential market-dominator, pointing out that it is working with companies such as FleetBoston and Freddie Mac.

While calling LendingTree “one of the better bets” to ultimately achieve profitability, James Punishill, a senior analyst with Forrester Research Inc. in Cambridge, Mass., said the latest financing was nonetheless critical for LendingTree’s survival.

“It’s a lifeline — it has saved them in the same way that Schwab and others bailed out E-loan during the summer,” he said. “But at the end of the day, there have been a lot of failures, and LendingTree has been among the only so far to survive.” Mr. Punishill attributed LendingTree’s success to its focus on bringing in more lenders and consumers, as well as what he called a “brilliant” marketing campaign, which he said has paid off.

He said by advertising a better customer experience, the company has created a buzz. “That creates more traffic, which creates more attention by financial institutions, which creates an even better customer experience,” he said.

Bob Spass, one of the principals at Capital Z, said he is confident in LendingTree’s potential for profit. “LendingTree has shown significant growth in the past 12 to 18 months,” he said. “They are the only real successful model in the sector and with their traction, we expect them to thrive.”

Boasting that LendingTree facilitated more than $4.6 billion in financial transactions last year and $1.4 billion in the fourth quarter alone, Mr. Lebda said the company has developed a reputation for living up to its market expectations.

As a result, he said, LendingTree has been able to build relationships with seven of the nation’s top 10 bank institutions, as well as with six of the top mortgage originators.

Mr. Lebda said the company was able to get financing because “from a financial standpoint, they see a very attractive investment.”

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