Douglas R. Lebda fell into a taxi with two associates, exhausted after a long day in Manhattan preparing his company's initial public offering.

Moments later the energetic entrepreneur was "up" again. Hearing his Charlotte, N.C., company's new ad on the New York cab's radio had him high-fiving his chief marketing officer, Thomas J. Reddin, and an adviser from Merrill Lynch & Co. "It made my day," the 30-year-old executive said. It has been a long four years of work for Mr. Lebda, a former derivatives expert at Price Waterhouse who decided to enter the emerging world of e-commerce with a new company, LendingTree Inc., after a frustrating experience applying for a mortgage. The public offering last week and this year's $40 million ad campaign are tangible signs that the company is making a mark.

But profitability won't be easy to achieve for the company, which offers an aggregate lending site that brings together borrowers and lenders and boasts relationships with 90 institutions. The company offers mortgages, home equity loans, auto loans, personal loans, and credit cards, and claims to have 34,000 repeat customers.

Like most Internet start-ups, LendingTree is bleeding cash as it invests in marketing. To differentiate itself from the myriad on-line lenders competing to serve the very small percentage of consumers who apply for loans on-line, LendingTree boasts that its site creates an aggressive business exchange where lenders compete for applicants.

"LendingTree has created the first true loan marketplace," Mr. Lebda said..

Mr. Lebda said customers, especially those surfing the Net, want choice. "On-line borrowers apply to an average of two to three sites," he said. "If you don't give them choice, they will go somewhere else." Mr. Lebda said his new business model, which he argued offers that choice, can be "very profitable" and has "tremendous growth potential."

So far, others seem to agree, and LendingTree has attracted some big investors. Last fall Capital Z Partners of New York; GE Capital of Stamford, Conn.; Goldman Sachs of New York; Marsh & McLennan Capital of New York; and of Norwalk, Conn., put up a combined $50 million in LendingTree's third round of financing.

Gene Devine, senior vice president of, a lender on the LendingTree site, said the company "creates community, value, and dialogue." Mr. Devine said LendingTree's ability to steer applicants to suitable lenders creates real value for both.

But like most Internet companies, LendingTree has so far not turned a profit and has embraced a new - and untested - business model.

Indeed, though LendingTree's revenue has been steadily rising, its net income has dropped precipitously as it incurs massive start-up losses. In its prospectus the company plainly states that it has a history of losses and that it expects to lose more. "Our revenue model and profit potential are unproven, and we cannot assure you that we will be able to become profitable," the prospectus says.

Nevertheless, the company continues to spend heavily to raise its profile and says it remains optimistic.

"We're investing heavily to bring more consumers to the site and to build our lender base," Mr. Lebda said. He stressed, however, that LendingTree's business model has a high-gross margin, in excess of 65%, and that in time its revenues will affect the bottom line.

The Feb. 16 IPO "went great," Mr. Lebda said. LendingTree officials expected the offering price to be $10 to $12 a share and to raise $35.3 million to pay for continued marketing. The stock opened at $12 Feb. 16 and was trading at $16.6875 Tuesday, after reaching $18 its first day on the market.

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