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Over centuries, lending went from formal to informal sectors, but the loan application and obtaining process was still complex and time-consuming. However, with the overall banking industry, lending has also turned digital in the past decade.
In 2022 the digital lending industry's global market size was estimated to be $12.6 billion and is projected to grow at a CAGR of 19.4%, valuing $71.8 billion by 2032. With fintech companies offering digital lending platforms, people can now apply for loans and credit cards online following a simple and quick process.
One such fintech startup is Avant. This Illinois, United States-based online lending platform is recognized for offering safe financial products. Let's dive in to uncover everything about Avant, its founders, its startup story, its business and revenue model, funding, growth, and more.
Avant – Company Highlights
- Company Name: Avant
- Headquarters: Chicago, Illinois, United States
- Sector: Financial Technology
- Founders: AI Goldstein, John Sun, and Paul Zhang
- Founded: 2012
- Valuation: $2 billion (2022)
- Website: avant.com
Avant – About
- Avant is a credit-first financial technology company offering a full suite of digital financial solutions, including loans and credit cards, to meet customers' needs, regardless of where they are on their financial journey.
- Serving 49 states in the United States and the United Kingdom, the company has connected approximately 3 million customers to $9 billion in loans and 1 million credit cards.
Avant – Founders and Team
Al Goldstein, John Sun, and Paul Zhang are the founders of Avant.
AI Goldstein
- Al Goldstein went to Gies College of Business (University of Illinois Urbana-Champaign) to study BS in Finance and Math. In addition to co-founding Avant, he is the co-founder at Enova International, Pangea Properties, Amount, and StoicLane. Moreover, Goldstein is the Executive Chairman at Avant, Pangea Properties, and Amount and CEO at Enova International and StoicLane.
John Sun
- John Sun studied BS in Finance at Gies College of Business (University of Illinois Urbana-Champaign). He founded SpringCoin and worked as CEO. Furthermore, Sun is the Co-founder of Avant and the Founder and CEO of Spring Labs.
Paul Zhang
- Paul Zhang completed BS in Computational Bioengineering at the University of Illinois Urbana-Champaign. He is the ex-Senior Software Engineer of Enova Financial and the ex-Technical Founder of Debteye. Currently, Zhang is the co-founder and CTO at Avant. Moreover, he is the part-time Board Member at Champaign and Angel Investor at Hyde Park Angels.
- With Matt Bochenek as the CEO and Margaret Hermes as the COO, Avant employs 650+ employees, of which 250 are local individuals.
Avant – Startup Story
- Avant, also known as AvantCredit, was founded in 2012 to improve the borrowing experience for middle-income consumers. John Sun and Paul Zhang graduated from the Y Combinator startup program in 2012 and looked forward to building their business, Debteye, a platform to help people manage their debt with informed decision-making based on their unique financial situation.
- Since Sun and Zhang had no income, they thought to apply for a personal loan at a traditional brick-and-mortar establishment. Sun found the loan application and obtaining process time-consuming and frustrating. Along with this, Sun and Zhang's Y Combinator venture inspired them to establish Avant.
- As former interns of AI Goldstein's Enova, Sun and Zhan grabbed the opportunity of partnering with the Chicago entrepreneur in December 2012. It's when they built a product to streamline the borrowing process.
- The company issued its first loan in 2013; later, it expanded to the UK in the fall. In April 2015, Avant launched the Avant Institutional Marketplace, enabling institutional investors to buy loans originating from the Avant technology platform.
- The company launched its credit card in 2107. In February 2020, Avant spun off its SaaS financial business unit as a new Amount company.
Avant – Mission and Vision
- Avant's mission is to empower its customers with innovative digital solutions designed to help them achieve their financial goals. The company honors its customer's financial journey by serving their needs with integrity, trust, and transparency.
Avant – Business Model
- Avant developed proprietary software that uses machine learning technology to mitigate default risk and fraud efficiently. The company provides a fully online experience, allowing customers to apply on Avant's website and eliminating the need for physical branches.
- Avant's platform simplifies the borrowing process by conducting bulk employment verification and doing funding over the Internet. Its technology leverages algorithms, machine learning protocols, analytical tools, and standard consumer data to determine a customized rate, amount, and length at which an individual can borrow money.
Avant – Revenue Model
- Avant offers personal loans ranging between $2,000 and $35,000 at lower possible interest rates. Moreover, it earns revenue by providing credit lines and online banking. The annual membership fee is $39, and the credit limit can range from $300 to $3,000.
Avant – Products and Services
- Avant offers credit cards and several types of loans, including personal loans, adoption loans, emergency loans, home improvement loans, debt consolidation loans, wedding loans, IVF & fertility loans, and vacation loans.
Avant – Challenges Faced
- Avant agreed to pay $3.85 million to settle the charges of the FTC on April 15, 2019. As per FTC's (Federal Trade Commission) lawsuit, the company used deceptive loan servicing practices. In addition, Avant violated the Telemarketing Sales Rule and the Electronic Fund Transfer Act.
Avant – Funding and Investors
- With 13 funding rounds, Avant raised $2.1 billion. On December 7, 2022, the company conducted its latest funding round –Private Equity Round. 20 investors invested in Avant, of which 8 are the lead ones, including Ares Management, WebBank, Pamlico Capital, Balyasny Asset Management, and General Atlantic.
Avant – Mergers and Acquisitions
- Avant acquired 2 companies, Level on April 7, 2021, and ReadyForZero on March 31, 2015.
Avant – Patents and Trademarks
- Avant is registered with 4 trademarks, and 'Insurance; Financial Affairs' is the popular class.
Avant – Growth
- In 2022, Avant's annual revenue was estimated to be $134.8 million ($195,330 revenue per employee). Moreover, its credit card users grew by 170% over the past two years. The company was valued at $2 billion in 2022. In 2013, Avant had 90 employees, which increased to 680 in 2023, with 566.6% growth.
Avant – Partners
- Avant collaborates with distribution, co-brand, funding, and product partners. Recently, the company partnered with Major League Soccer (MLS) and TreeQual.
Avant – Awards and Achievements
- Avant has been featured in The New York Times, Bloomberg, The Wall Street Journal, TechCrunch, and Fortune. Moreover, the company received multiple honorable awards:
- Named #6 to Forbes America's Most Promising Companies list and Next Billion Dollar Startups list in 2015.
- Inc. Magazine listed co-Founder and CTO Paul Zhang as 30 Under 30.
- Executive Chairman AI Goldstein received EY Entrepreneur of the Year Midwest award.
- In addition, the company received the Moxie Award for Breakthrough Digital Company of the Year and one of the Top Global Private Companies by AlwaysOn Global.
Avant – Competitors
Some direct competitors of Avant are as follows:
- Chime
- OneMain Holdings
- SoFi
- Capital One
- Applied Data Finance
- The Social Loan Company
- Prosper Marketplace
- Lending Club
- OnDeck
FAQs
What does Avant do?
- Avant is a credit-first financial technology company offering a full suite of digital financial solutions, including loans and credit cards, to meet customers' needs, regardless of where they are on their financial journey.
Who are the founders of Avant?
- AI Goldstein, John Sun, and Paul Zhang are the founders of Avant.
How Avant earns revenue?
- Avant earns revenue by providing credit lines and online banking. The annual membership fee is $39, and the credit limit can range from $300 to $3,000.
Who are the main competitors of Avant?
Some direct competitors of Avant are as follows:
- Chime
- OneMain Holdings
- SoFi
- Capital One
- Applied Data Finance
- The Social Loan Company
- Prosper Marketplace
- Lending Club
- OnDeck
