Avant, the personal loan startup, doesn’t only want to provide loans to borrowers but it wants to help banks do that as well as it aims to take advantage of the latest trend in the financial technology market: fintech and traditional financial firm partnerships.
It's not too much of a shift for Avant’s Chief Executive Al Goldstein, the co-founder and serial entrepreneur who was behind online lender Enova and Pangea Properties, a REIT focused on distressed properties. In September Avant announced it was spinning off its infrastructure technology business into Amount, a consumer lending product built for banks. If banks don’t want to spend the money to build out their own lending technology they can tap Amount instead. But the new Avant unit isn’t starting out small. It’s setting its sights on the top 50 banking institutions based on assets with Goldstein telling Benzinga it has already forged partners with four big banks that are live on the platform. He declined to name the banks but said one is a top ten U.S. bank while another is based in the UK. Avant’s first bank partner was Regions Bank, which started using its SaaS product in 2016. The aim of the new unit is to let the banks create their own lending product but use Avant’s technology for the behind the scenes underwriting process.
Goldstein knows better than to play his hand too early, given his penchant for creating and growing startups. Prior to Avant, the 37-year-old entrepreneur who won the EY’s Entrepreneur Of The Year 2015 Midwest Award, co-founded Pangea Properties a REIT that invested in distressed multi-family properties and was the co-founder, president, and chief executive of CashNetUSA, which now goes by the name Enova International. He sold that for $265 million back in 2006. Prior to his startups, Goldstein honed his skills at Deutsche Bank where he was part of the leveraged finance practice.
Goldstein’s been there done that experience isn’t only helping it forge relationships with some of the world’s biggest banks but it has enabled the company to lure top talent in the online lending and fintech markets its way. That’s key as competition is fierce and only expected to get more intense as traditional players forge full steam ahead into online lending. In 2016 JPMorgan partnered with OnDeck and Goldman Sachs has its Marcus, online lending platform. Everyone in the industry knows Goldstein and people want to work with him, which has served Avant well. The company relies on algorithms, machine learning tech, and data analytics to underwrite a loan. Back in 2013 it was providing loans in 16 states and is now in 46 states. Since its inception, it has issued $4 billion in loans and counts 600,000 customers.
Born in Uzbekistan, Goldstein came to the U.S. when he was eight. He graduated from the University of Illinois in 2002 armed with a bachelor of finance degree and after a 13-month stint at Deutsche Bank launched his first company. When Goldstein hooked up with Avant’s other two founders--former colleagues, John Sun and Paul Zhang-- they weren’t out to create another lending platform for consumers with top-notch credit. They went after the underserved middle-class consumer, who has long struggled with accessing personal loans. With machine learning, AI and data analytics capabilities, Avant was able to figure out how to lend to that group and hasn’t looked back since.