After postponing its IPO last year, Elevate Credit, the venture capital-backed loan company, went public today on the New York Stock Exchange.
Elevate priced at $ 6.50 per share, closing the day up more than 19% at $ 7.76, but it was still well below the expected range of $ 12 to $ 14. They decided to implement the offer to take advantage of an open “IPO window”, with a strong investor appetite for newly public tech companies.
“We started this IPO process a year ago in a really terrible market and it’s great to do it,” said CEO Ken Rees. He was so excited to ring the opening bell that he “broke the hammer”.
It has been a particularly difficult environment for lending startups following the challenges of the Lending Club and other industry regulatory concerns. But Rees said he was optimistic that any future payday lending regulations would only “get rid of a lot of bad actors” and that Elevate would prevail because their standards are in line with those of Consumer Finance Protection. Office (CFTB).
Elevate makes loans easy for people with a lower credit score, a great potential market opportunity, but a very risky business. They have an algorithm that uses machine learning to assess a user’s online habits and determine if this is a customer they want to try their luck with.
“WWe take the risk because we know the quality of these customers and their performance, ”said Rees. Claiming to have “10,000 data points” they look at financial metrics like bank accounts to determine cash flow, but also “electronic metrics” as if users take the time to do their research before filling out the form. on the Elevate website.
Rees touted the growth in its revenue, which rose from $ 434 million in revenue in 2015 to $ 580.4 million in 2016. Losses amounted to $ 22.4 million last year , up from $ 19.9 million the previous year.
Elevate is based in Fort Worth, Texas, but has been successful in attracting large venture capitalists from Silicon Valley. Sequoia owned 27.2 percent of the company before the IPO and TCV held 21.7 percent.
Elevate was once part of Think Finance, or TFI, but was split in 2014.
Elevate’s performance in the stock market could be an indicator for other lending startups. SoFi has been talking about an IPO for several years now.
Elevate follows Snap, MuleSoft, and Alteryx, making it the fourth tech IPO of the year. Okta, Yext, and Cloudera are also slated to go public in the near future.