GreenSky Credit Company Has Increased Their Fundraising Goals
GreenSky credit company is an online lending platform that has opened the floor for public trading on the Nasdaq.
The company is growing at an accelerated pace, and it appears that other fintech companies are unable to keep up. They have already raised a staggering $874 million, and they have announced that their pricing will be higher than they originally expected.
At present, the price for GreenSky stock is set at $23 per share. They offer additional perks to underwriters by allowing them to purchase 5.7 million additional shares at a discounted rate within 30 days. Their initial placeholder goal was $100 million, and the company has since raised it to $748,1 million. If underwriters purchase these shares at the maximum share price, GreenSky could rake in approximately $901.7 million.
Gerry Benjamin, who’s on the board of directors, has stated that the company is very excited about its current position. The company aims to continue working in medical and home improvement industries, but it may also expand into other areas. Either way, it will continue to offer its products and services to over 12,000 merchants. Since its launch, GreenSky credit company and its banking partners have financed over $12 billion worth of transactions to 1.7 million customers.
Benjamin believes that the company is in an excellent position to maximize its profits with this latest strategy. GreenSky provides a digital platform which enables contractors and retailers to offer instant loans to clients. The company has four offices in the Metro Atlanta area with 1,100 associates.
“I believe that there is no other fintech company in the world that is offering more value than we are. Everyone is excited about our future prospects,” he said.
There are several companies backing and underwriting the deal, including Morgan Stanley, J.P. Morgan, Goldman Sachs, TPG, and the Pacific Investment Management Company. Benjamin had already anticipated the IPO’s success, so he was not at all surprised by it.
“I think the GreenSky company is an unusual one, we do things differently than anyone else, and so far, our strategies have not failed us. A lot of experts in the field want to know the formula for our growth and profitability,” states Benjamin.
There have only ever been seven start-ups in the Atlanta area to raise over $100 million, but GreenSky credit company has managed to raise $350 million from several different investors. Although some experts believe that GreenSky is being too ambitious in its fundraising goals, the company has a successful track record with a practical business model and a solid corporate governance. The company has not raised any outside capital for over ten years because CEO David Zalik chose to focus on structuring the business in such a way that it did not incur any of the burdensome costs of other online lenders.
The Wall Street Journal believes that GreenSky could possibly raise $1 billion at a valuation of $5 billion after filing for the IPO.
The company has demonstrated high profits over the past five years and, at the end of 2017, it had acquired an estimated $250 million in revenue.
Moody’s investor service anticipate GreenSky credit company will have an estimated $400 million in revenue by the end of 2018. In the past, the majority of fintech IPOs have faced difficulties after going public, so some experts are skeptical about GreenSky’s success. But Zalik has established a business with staying power.
In terms of performance, GreenSky credit loans have grown steadily over the years. The company has provided a large number of home improvement loans. According to a 2018 survey conducted by LightStream, approximately 58 percent of American homeowners will renovate their homes this year. Consumer spending habits also work to support the GreenSky IPO. The report states that there has been a 29 percent increase from 2017 of people who intend on taking out a home improvement loan. There are also 54 percent more 18-34-year olds who plan to fund projects through a home improvement loan. Although the report did mention that 30 percent of homeowners will fund their projects with a credit card, that number was 16 percent less for homeowners between the ages of 18 to 34 who planned to use a credit card.
Another trend that will work in GreenSky’s favor is that an increasing number of people are finding it difficult to pay for healthcare costs, which means that they are turning to short-term loans to pay their medical bills.
A recent report by the Commonwealth Fund states that only 62 percent of patients are confident that they will be able to afford medical treatment.
In general, experts believe that this IPO will lead to profitable investments based on the unique position that GreenSky Inc. holds within the market. In a rare interview with David Zalik, he attributed the success of his company to his restraint in taking out large loans when he first started the business. Being frugal, in short, is what has sustained him. However, now that the company has opened its doors to the public, fundraising is going to be a lot easier.