FinTech Loans GreenSky has confidentially filed documents for an Initial Public Offering (IPO).
The Wall Street Journal reported that the Atlanta-based company, which allows retailers, health care providers and home entrepreneurs to offer loans to their customers, could go public as early as this summer. Sources also said GreenSky could attempt to raise $ 1 billion, which would be a rare feat. In fact, since 2015, only six US-listed tech companies have raised that much or more.
But there are also those who say the company could skip an IPO and opt for another private equity sale.
While private investors have been generous in funding startups with credit, IPOs have been rare in recent years due to the rise in borrower defaults, as well as increased competition.
In addition, shares of online lenders LendingClub and OnDeck Capital recently fell 86% and 77%, respectively, from their IPO prices.
However, GreenSky separates itself from the competition because it does not grant loans directly. Instead, it arranges financing for more than 16,000 merchants and service providers, while a network of banks – including Fifth Third Bancorp, SunTrust Banks and Regions Financial – funds loans and keeps them on their balance sheets.
Since it is a private company, GreenSky does not release financial data, but its forecasted annual revenue was over $ 400 million and is expected to grow by more than 20% next year. Sources say the company is on track to hit more than $ 200 million in profit this year before interest, taxes, depreciation and amortization.
At the end of last year, GreenSky raised $ 200 million from Pacific Investment Management Co., which valued the company at nearly $ 4.5 billion. Previous 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 with an acquisition by CF Corp., but talks ultimately collapsed.