Although he’s not a household name, GreenSky founder and CEO David Zalik is a living legend among the financial technology sector. Having been at the helm of GreenSky for more than 12 years makes Zalik one of the most experienced players in the sector. And over that time, he has been able to bootstrap his firm from absolute zero to a company valued at more than $4.5 billion.
This incredible growth can be attributed to the simple yet value-adding business model of GreenSky. The company has focused for its entire existence on creating seamless parings between prime-credit borrowers and lenders looking to expand their rosters of good loans. It has focused on big-ticket point-of-sale purchases, such as home remodeling projects and solar energy installations, as an area where previous frictions of the lending process could be streamlined through technology.
Specifically, GreenSky has been able to devise a system that matches some of the top lenders in the country with customers who need lending instantly. In many cases, merchants are able to present borrowers with instant approval for loans with astonishingly good terms, such as zero down, zero interest and no payments for an entire year. Because the average borrow with whom GreenSky transacts has a FICO score of 760, these loans are almost always paid back in full before the higher rates kick in.
At the same time, lenders like Fifth Third Bancorp, Sun Trust and Region’s Bank have been supplied with a steady stream of high-quality new loans that would otherwise never have been originated.
Now, Zalik is looking to take his company public in what will almost certainly amount to one of the largest IPOs in the fintech space’s history. Zalik has stated that his company has reached a phase of maturity where he feels that the short-term thinking and pressure to post solid quarterly growth that often comes with going public is something that GreenSky can handle at this point.
For investors, the IPO may provide one of the strongest opportunities that have come along in a space that has been wracked by underperformance.