Although transcatheter arterial chemoembolization (TACE) is the standard of care for intermediate-stage hepatocellular carcinoma (HCC), this is a largely heterogeneous disease that includes a subgroup of patients who do not benefit from TACE. The treatment strategy for this subgroup of patients currently remains an unmet need in clinical practice. Here, we performed a proof-of-concept study that lenvatinib may be a more favorable treatment option over TACE as an initial treatment in intermediate-stage HCC patients with large or multinodular tumours exceeding the up-to-seven criteria. This proof-of-concept study included 642 consecutive patients with HCC initially treated with lenvatinib or conventional TACE (cTACE) between January 2006 and December 2018. Of these patients, 176 who received lenvatinib or cTACE as an initial treatment and met the eligibility criteria (unresectable, beyond the up-to-seven criteria, no prior TACE/systemic therapy, no vascular invasion, no extrahepatic spread and Child-Pugh A liver function) were selected for the study. Propensity score matching was used to adjust for patient demographics. After propensity-score matching, the outcome of 30 patients prospectively treated with lenvatinib (14 in clinical trials, one in an early access program and 15 in real world settings) and 60 patients treated with cTACE as the initial treatment was compared. The change of albumin-bilirubin (ALBI) score from baseline to the end of treatment were -2.61 to -2.61 for 30 patients in the lenvatinib group ( = 0.254) and -2.66 to -2.09 in the cTACE group ( < 0.01), respectively. The lenvatinib group showed a significantly higher objective response rate (73.3% vs. 33.3%; < 0.001) and significantly longer median progression-free survival than the cTACE group (16.0 vs. 3.0 months; < 0.001). Overall survival was significantly longer in the lenvatinib group than in the cTACE group (37.9 vs. 21.3 months; hazard ratio: 0.48, < 0.01). In patients with large or multinodular intermediate-stage HCC exceeding the up-to-seven criteria with Child-Pugh A liver function, who usually do not benefit from TACE, lenvatinib provides a more favorable outcome than TACE.