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Green Sky Credit Files for a Confidential IPO

GreenSky Credit takes pride in its ability to differentiate itself from other tech companies just starting out. The company and its CEO, David Zalik, continues to shy away from receiving any outside seed money. Offering and arranging loans for home improvement, GreenSky Credit uses old-school methods to continue to fund its business operations.

Recently, the company confidentially filed to start the process for an initial public offering, cites the Wall Street Journal. If the company does go public, it could raise nearly $1 billion and increase its overall valuation to nearly $5 billion. If Zalik does take his company public, he would be among the few tech startups that did decide to list on Wall Street. Well known tech startups like Credit Karma, Stripe and Uber continue to shy away from going public.

Although the company did file for an IPO, it could decide to scrap the idea altogether and remain private. By filing confidentially, Zalik and GreenSky Credit can take the time to prepare for the IPO out of the public’s eye. Founded in 2006, Zalik has turned the company into one of the most prominent technology-based financial companies in the country. Zalik has years of experience working with banks, and in doing so transfers a big portion of the risk to well-known banks such as SunTrust, Fifth Third and Regions.

It is an ingenious move, which does not put GreenSky Credit on the hook for borrowers who default on their loan obligations. Additionally, Zalik earns his company money by setting up arrangements where the banks pay Green Sky Credit 1 percent for servicing rights, including generating the loans. Zalik’s company also gets paid 6 percent of any loan amounts.

Consumers who are interested in applying for a loan with GreenSky Credit can apply using their smartphones, and a decision usually comes through in a manner of seconds. With the share prices of well-known online lenders such as OnDeck and Lending Club falling dramatically, GreenSky Credit could position itself as one of the top online lenders with its frictionless business model, according to some analysts.

https://www.bloomberg.com/news/articles/2016-09-26/instant-lending-made-this-college-dropout-a-billionaire