Chicago based consumer lending platform Avant has raised an additional $325m via a Series E funding round, with total equity raised now hitting $659m – reports suggest that the business is now being valued at around $1.5 billion. The new funding round was led private equity firm General Atlantic and included major US bank JPMorgan Chase. Current shareholders already include Tiger Global Management, August Capital, RRE Ventures and DFJ Growth.
Founded in 2012, the platform employs over 700 staff in Chicago, LA, Canada and the UK. Its core business focuses on lending to consumers who are just below prime and has to date sold $1.7bn of unsecured loans, with the lender on track to hit $2bn in origination by the end of the year. Like many alternative lenders Avant uses innovative technology, specifically machine-learning algorithms, alongside big data to far more accurately assess the credit worthiness of borrowing customers. More than 250,000 loans have been issued globally through the Avant website.
The company generally charges interest rates of 9 percent to 36 percent with the core loans based on offering instalment loans and lines of credit to borrowers at higher interest than ordinary rates. The company makes loans directly, up to $35,000 in the US.
Avant has been offering loans in the UK since October 2013 through the website https://www.avantcredit.co.uk/. Formerly called SpringCoin, now known simply as "Avant", recent recruit Raj Singh is running its UK operation. Loans of upto £20,000 over the course of 12-60 months are offered here with rep interest rates of 48.5% plus zero origination fees and no prepayment fees. According to Avant its UK operations have advanced over 30,000 loans and £60m in principal issued to date – the business reckons it’s on track to issue over £100m in loans in the UK by the end of the year.
Avant in effect operates a hybrid model in that it lends both off its own balance sheet and via third party investors – the new equity fund raising will allow $1.5 billion of balance sheet lending. This increase in operational gearing was also recently boosted by an inaugural $139 million securitization. The new round also brought Avant's total debt raised to $1.1 billion, with an additional $1.8 billion sold through the Avant Institutional Marketplace.
Bottom Line? Avant is growing fast. The US lending platform was recently named number 6 on Forbes America's Most Promising Companies list as well as making Forbes list of Next Billion Dollar Startups. The fundraising makes the US lender yet another “unicorn” within the alternative finance space – a term that is widely used to refer to startup companies with valuations greater than $1 billion. Other “unicorns” include Funding Circle, Uber, Snapchat and Instacart. Clearly though this fast growing US lender has a much bigger target for the future - CEO Al Goldstein told one US news service in September that Avant is “ trying to build a $100 billion company”.
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