Lending FinTech GreenSky has confidentially filed paperwork for an initial public offering (IPO).
Atlanta company could seek to raise $1 billion at a valuation of roughly $5 billion in public offering
PHOTO: MICHELLE GUSTAFSON/BLOOMBERG NEWS
The Wall Street Journal reported that the Atlanta-based company, which enables retailers, health-care providers and home contractors to offer loans to their customers, could go public as soon as this summer. Sources also said that GreenSky could attempt to raise $1 billion, which would be a rare feat. In fact, since 2015, just six U.S.-listed technology companies have raised that much or more.
But there are also those saying that the company might skip an IPO and opt to do another private share sale.
While private investors have been generous in financing lending startups, IPOs have been scarce in recent years because of rising defaults among borrowers, as well as increased competition.
In addition, shares in online lenders LendingClub and OnDeck Capital were recently down 86 percent and 77 percent, respectively, from their IPO prices.
However, GreenSky separates itself from the competition because it doesn’t make loans directly. Instead, it arranges financing for over 16,000 merchants and service providers, while a network of banks — including Fifth Third Bancorp, SunTrust Banks and Regions Financial — funds the loans and keeps them on their balance sheets.
Since it is a private company, GreenSky doesn’t release financials, but its projected annual revenue was over $400 million and is expected to increase by more than 20 percent in the next year. Sources say that the company is on track to hit more than $200 million in earnings this year before interest, taxes, depreciation and amortization.
Late last year, GreenSky raised $200 million from Pacific Investment Management Co., which valued the company at nearly $4.5 billion. Earlier investors include Fifth Third, asset managers TPG and Wellington Management Co. and venture-capital firms DST Global and QED Partners.
Last year, GreenSky was in talks to go public through an acquisition by CF Corp., but the talks ultimately fell through.