Avant (company)

Last updated
Avant
Company type Private
Industry
Founded2012 (2012)
Founder
  • Al Goldstein
  • John Sun
  • Paul Zhang
Headquarters Chicago, Illinois, U.S.
Area served
U.S., U.K.
Key people
Matt Bochenek (CEO)
Products
RevenueDecrease2.svg US$316.7 million (2017)
Increase2.svg US$−15.7 million (2017)
Number of employees
550 (2018)
Website avant.com

Avant, LLC, formerly AvantCredit, is a private Chicago, Illinois-based company in the financial technology industry. The company was established in 2012 by serial entrepreneur Albert "Al" Goldstein, [1] John Sun, and Paul Zhang. Initially structured as a mid-prime lender, [2] the company issued its first personal unsecured loan in early 2013 using its proprietary technology to determine an individual's creditworthiness.

Contents

Avant's technology applies algorithms, machine-learning protocols, and analytical tools in addition to the standard consumer data pulled to determine a customized rate, amount and length at which money can be borrowed. [3] The company began providing access to loans in just 16 states in 2013. Avant currently issues loans in 46 states, and in October 2013, the company expanded beyond US borders to Canada [4] and the United Kingdom. [2]

From 2012 to 2015 the company saw substantial growth [5] with over $1 billion in loans originated through Avant's website and $1.4 billion in contributions by investors, including August Capital, Tiger Global and Victory Park Capital. [6]

Overview

Upon entering the growing financial technology FinTech industry, Avant developed proprietary software that attempts to efficiently mitigate default risk and fraud by using machine-learning technology. The company has worked towards a fully online experience where customers can apply on Avant's website. This eliminates the need for physical branches, but also is able to simplify the borrowing process, with the bulk of its employment verification and funding done over the internet. [7] In April 2015, Avant launched the Avant Institutional Marketplace with global alternative asset manager Kohlberg Kravis Roberts, Victory Park Capital, and Jefferies as lead investors. The $400 million forward-flow financing arrangement enables institutional investors to purchase loans originated through the Avant technology platform and benefits Avant by diversifying funding sources. [8]

Company establishment

After graduating from the Y Combinator startup program in 2012, [9] Sun and Zhang looked to build their business, Debteye, a platform designed to help individuals manage their debt by making informed decisions based on their unique financial situation. [9] With no income, Sun sought a personal loan at a traditional brick-and-mortar establishment. Sun found the process of applying for and obtaining a loan frustrating and time-consuming. This, along with Sun and Zhang's Y Combinator venture, became the inspiration for what became Avant. [10] As former interns of Goldstein's at Enova, Sun and Zhang saw an opportunity to partner with the Chicago entrepreneur in December 2012 and built a product that made borrowing a more streamlined process. The startup set up its headquarters in Chicago where it raised an initial $1 million in seed funding. As of April 2015, Avant has raised over $1 billion in funding and has grown from its original three founders to over 650 employees. [11]

Acquisition of ReadyForZero

In February 2015, AvantCredit acquired the debt management app and platform, ReadyForZero and re-branded itself to Avant. [12] The acquisition was designed to further Avant's mission of "lowering the costs and barriers of borrowing." [13] Another result of the acquisition was the opening of a second office location in Los Angeles, where Ready for Zero had initially been established by its founders, Rod Ebrahimi and Ignacio Thayer, who like Sun and Zhang were also Y-Combinator graduates. [14]

Effective November 12, 2016, Avant will shut down ReadyForZero's credit score and debt planner tools. All user accounts will be deactivated and users will no longer be able to log in. As of this date the company has not commented on the reason for shutting down the ReadyForZero platform. [15] [16] [17] [18]

Recognition

In 2015, Avant was named #6 to Forbes America's Most Promising Companies list as well as Forbes list of Next Billion Dollar Startups. Chief Technology Officer Paul Zhang was listed as one of Inc. Magazine's 30 Under 30 [19] [20] and chief executive officer Al Goldstein won the EY Entrepreneur of the Year Midwest award. [21] [22] Avant has won numerous awards, including the Moxie Award for Breakthrough Digital Company of the Year, Company of the Year – Financial Services at the American Business Awards and one of the Top Global Private Companies by AlwaysOn Global. [23] In 2014 Avant raised $225 million in equity between Tiger Global Management, PayPal co-founder Peter Thiel, and the private equity firm KKR. [24] [25] [26] [27]

Controversies

On 15 April 2019, Avant agreed to pay $3.85 million to settle charges of the Federal Trade Commission. According to the FTC's lawsuit, the company engaged in deceptive loan servicing practices and violated the Telemarketing Sales Rule and the Electronic Fund Transfer Act. [28] [29]

Spinoff

In February 2020, Avant announced the completion of the spinoff of its SaaS financial technology business unit as a new company called Amount. [30] [31]

See also

Related Research Articles

<span class="mw-page-title-main">Y Combinator</span> American startup accelerator

Y Combinator Management, LLC (YC) is an American technology startup accelerator and venture capital firm launched in March 2005 which has been used to launch more than 4,000 companies. The accelerator program started in Boston and Mountain View, expanded to San Francisco in 2019, and was entirely online during the COVID-19 pandemic. Companies started via Y Combinator include Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Reddit, Stripe, and Twitch.

LendingClub is a financial services company headquartered in San Francisco, California. It was the first peer-to-peer lender to register its offerings as securities with the Securities and Exchange Commission (SEC), and to offer loan trading on a secondary market. At its height, LendingClub was the world's largest peer-to-peer lending platform. The company reported that $15.98 billion in loans had been originated through its platform up to December 31, 2015.

Credit Karma is an American multinational personal finance company founded in 2007. It has been a brand of Intuit since December 2020. It is best known as a free credit and financial management platform, but its features also include monitoring of unclaimed property databases and a tool to identify and dispute credit report errors. The company operates in the United States, Canada and the United Kingdom.

Lenddo was a Singapore-based software-as-a-service company which used non-traditional data comprising social media and smartphone records in order to ascertain customers' financial stability. Its vision was “to improve financial inclusion for at least a billion people" in developing countries around the world. In October 2013, Lenddo had over 350,000 members globally. In October 2017, Lenddo merged with company Entrepreneurial Finance Lab (EFL), and was subsequently named, LenddoEFL

<span class="mw-page-title-main">LendUp</span> American financial technology company

LendUp was an American online direct lender. It offered payday loans, installment loans, and credit cards to consumers with low credit scores using publicly available data to assess creditworthiness. The company referred to its customers as “the emerging middle class.” LendUp also issued credit cards in partnership with Tom Steyer's Beneficial State Bank.

SoFi Technologies, Inc. is an American personal finance and financial technology company founded at Stanford University in 2011. It provides various direct banking services, while also serving other financial institutions via its technology platform. SoFi reports 8.8mn users and 158mn platform accounts, as of 2024.

Earnest is a technology-enabled fintech lender headquartered in San Francisco, California that offers tertiary education financing products, including student loan refinancing and private student loans. The company evaluates a person’s full education, employment, and financial profile, in addition to their credit score in order to obtain a complete financial profile of each applicant. This type of credit is referred to as "merit-based lending."

Financial technology is an industry composed of companies that use technology to offer financial services. These companies operate in insurance, asset management and payment, and numerous other industries. FinTech has emerged as a relatively new industry in India in the past few years. The Indian market has witnessed massive investments in various sectors adopting FinTech, which has been driven partly by the robust and effective government reforms that are pushing the country towards a digital economy. It has also been aided by the growing internet and smartphone penetration, leading to the adoption of digital technologies and the rise of FinTech in the country

LendEDU is an online marketplace for a variety of financial products, including student loans, personal loans, and credit cards. It has been compared to Lendingtree.com, but for student lending. In 2018, LendEDU encountered controversy when it was revealed to be the undisclosed owner of "Student Loan Report", and its CEO was accused of "deceiving news organizations with a fake source".

<span class="mw-page-title-main">WeLab</span> Hong Kong financial technology company

WeLab Limited is a Hong Kong financial technology company offering a range of services, such as online consumer credit platforms and virtual banking. It was founded in January 2013 by Simon Loong, Kelly Wong and Frances Kang and is best known for being the parent company of WeLab Bank, one of the first virtual banks to be granted a license to operate in Hong Kong.

<span class="mw-page-title-main">Funding Societies</span>

Funding Societies is a Southeast Asian digital financing platform for small and medium-sized enterprises (SMEs), headquartered in Singapore. It was the first such platform in Singapore to engage an escrow agency to independently and safely manage investors’ funds. In Indonesia it is known as Modalku. Since its launch, it has disbursed more than US$2.6 billion in business financing to MSMEs through more than 5.1 million loan transactions.

GreenSky, LLC is a financial technology company founded in 2006 based in Atlanta, Georgia. It provides technology to banks and merchants to make loans to consumers for home improvement, solar, healthcare and other purposes.

<span class="mw-page-title-main">Unicorn bubble</span>

A unicorn bubble is a theoretical economic bubble that would occur when unicorn startup companies are overvalued by venture capitalists or investors. This can either occur during the private phase of these unicorn companies, or in an initial public offering. A unicorn company is a startup company valued at, or above, $1 billion US dollars.

Mpower Financing is a public-benefit corporation. It is based in Washington, DC, with an office in Bangalore, India. It was founded by Manu Smadja and Michael Davis in 2014, both of whom attended INSEAD in Paris where they met.

Brex Inc. is an American financial service and technology company that offers business credit cards and cash management accounts to technology companies. Brex cards are business charge cards, which require at least $50,000 in a bank account if professionally invested, if not with $100,000 to open, and cardholders who default won't damage their personal credit or assets. Emigrant Bank issues the Brex cards.

Utah-based Lendio, founded in 2011 by Brock Blake and Trent Miskin, is a free online loan marketplace in the U.S. targeting small business owners.

Brock Blake is founder and CEO of Lendio, an online marketplace for small business loans. Blake is an Inc. 500 CEO, speaker, and Forbes columnist.

Lighter Capital is a revenue-based financing lender that specializes in providing financial capital to small technology companies.

Upgrade, Inc. is an American neobank founded in 2016. It has raised $600 million in equity funding and made over $10 billion in loans since its launch in 2017. Upgrade is headquartered in San Francisco, California with offices in Phoenix, Arizona and Montreal, Quebec, Canada. The company offers credit and banking products to consumers and delivers fixed-rate credit cards and loans. The company's other services include credit monitoring and education tools.

Michael 'Mike' Cagney is an American entrepreneur. He is the co-founder and CEO of financial services company Figure Technologies, a member of the founding team of Provenance Blockchain and the co-founder and former CEO of SoFi. Cagney is also co-founder and was the managing member of hedge fund Cabezon Investment Group.

References

  1. ↑ Quittner, Jeremy (7 May 2014). "Where the Jobs Are (and Aren't) May Just Surprise You". Inc Magazine.
  2. 1 2 Wong, Wailin (14 Aug 2013). "AvantCredit raises $20M in equity financing". Chicago Tribune.
  3. ↑ Barba, Ronald (31 Mar 2015). "AvantCredit Rebrands as 'Avant', Acquires ReadyForZero". Tech.Co (formerly Tech Cocktail). Tech.com.
  4. ↑ "Marketplace Lending Platform Avant Reaches 300,000 Customers and Continues Global Expansion with Canada Launch".
  5. ↑ Daniels, Steve (7 Feb 2015). "Guess who's Chicago's fastest-growing startup since Groupon". Crain's Chicago Business. Crain Publishing.
  6. ↑ Dallke, Jim (13 Apr 2015). "Avant Lands Another $400M to Launch Loan Program for Institutional Investors". Chicago Inno. Streetwise Media.
  7. ↑ Bolton, Deidre (27 Aug 2015). "AvantCredit's Online Only Approach to Loans". Bloomberg News.
  8. ↑ Graham, Meg (13 Apr 2015). "Avant launches investor marketplace via $400 million financing deal". Chicago Tribune.
  9. 1 2 Strauss, Karsten (15 Apr 2015). "Loan Star: Is Avant A Future Billion Dollar Unicorn?". Forbes/Entrepreneurs.
  10. ↑ Quittner, Jeremy (22 Apr 2015). "Building a Startup, One Loan at a Time". Inc Magazine.
  11. ↑ Haertel Jr., Larry (23 Apr 2015). "Industry Profile – Al Goldstein". Orchard. Archived from the original on 29 May 2017. Retrieved 30 September 2015.
  12. ↑ Perez, Sarah (31 Mar 2015). "Online Lender Avant Acquires Debt Management Service ReadyForZero". AOL.com. TechCrunch.
  13. ↑ Barba, Ronald (31 Mar 2015). "AvantCredit Rebrands as 'Avant', Acquires ReadyForZero". Tech Cocktail. Tech.co.
  14. ↑ McLean, Tessa (31 Mar 2015). "AvantCredit rebrands, acquires ReadyForZero". Builtin.com. builtinchicago.org.
  15. ↑ "Avant kills off ReadyForZero one year after buying it - AltFi".
  16. ↑ "Reference at www.crowdfundinsider.com".
  17. ↑ "Executive out at online lender Avant; ReadyForZero debt-tracker killed - Chicago Tribune". Chicago Tribune .
  18. ↑ "Ready For Zero Just Shut Down, Here's Where to Track Your Debt Now | Life Hacker India". Archived from the original on 2016-11-16.
  19. ↑ Fenn, Donna (30 Apr 2015). "Remember These Names: The 2015 30 Under 30 List Is Here". Inc.com.
  20. ↑ Conception, Summer (22 Apr 2015). "Founders of Two Chicago Startups Make Inc.'s "30 Under 30"". 5 NBC Chicago. NBC.
  21. ↑ "EY Entrepreneur of the Year Midwest". Ernst & Young. EY Entrepreneurs. Retrieved 17 Jun 2015.
  22. ↑ Graham, Meg (18 Jun 2015). "Chicago area shines at EY's Midwest entrepreneur awards". Chicago Tribune.
  23. ↑ "Announcing the top 2015 Global 250 private companies". AlwaysOn. AlwaysOn. Archived from the original on 10 August 2015. Retrieved 11 Aug 2015.
  24. ↑ Chernova, Yuliya (4 Dec 2014). "Tiger Global Co-Leads $225M Series D for Lending Co. AvantCredit". The Wall Street Journal .
  25. ↑ Alden, William (4 Dec 2014). "AvantCredit, an Online Lender, Raises New Financing". The New York Times . Dealbook.
  26. ↑ Griffeth, Erin (23 Jul 2014). "Deals of the Day: OneWest, FreshBooks, AvantCredit". Fortune.
  27. ↑ McBride, Sarah (4 December 2014). "AvantCredit Raises $225 Million From Tiger Global, Peter Thiel". Business Insider . United States. Retrieved 25 January 2017.
  28. ↑ "Online Lending Company Agrees to Settle FTC Charges It Engaged in Deceptive and Unfair Loan Servicing Practices". Federal Trade Commission. 2019-04-15. Retrieved 2019-04-17.
  29. ↑ Beyoud, Lydia. "Fintech Lender Avant Settles With FTC for $3.85 Million (1)". news.bloomberglaw.com. Retrieved 2019-04-17.
  30. ↑ "Avant splits into two companies, with potential IPO eyed for one". Crain's Chicago Business. 2020-02-05. Retrieved 2020-12-11.
  31. ↑ LLC, Amount. "Avant Spins Out SaaS Business Amount". www.prnewswire.com. Retrieved 2020-12-11.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.