Al Goldstein, 34, is a Millennial, a serial entrepreneur, and the head of what is now a billion-dollar company.
His latest venture, Avant, which is based in Chicago, Ill., is a marketplace lender targeting less-than-prime clients. Early on Wednesday, the company announced its agreement to a sizable $325 million in Series E equity funding. Set to close mid-October, the round is led by renowned equity firm General Atlantic, which should put the total equity raised to $650 million -- for an estimated $2 billion valuation.
"Our partnership with a leading growth equity firm like General Atlantic signifies our commitment to building a premier technology brand," Goldstein said.
Additional investors Balyasny Asset Management and J.P. Morgan participated in the Series E, joining the company's star-studded list of existing partners like Peter Thiel and RRE Ventures.
A former Inc. 30 under 30 honoree, Avant is among the many players taking aim at a trillion dollar problem: consumer debt. That includes finance giant LendingClub, which raised an enviable $870 million in its December 2014 IPO.
"It feels really crowded," Goldstein says of the sector. "But in reality, there are only three or four platforms that scale."
Significantly, Avant wants to help what it views to be an underserved demographic: Young clients with patchy credit, or FICO scores typically between 580 and 700. It does this by using an automated platform to evaluate clients on non-traditional risk factors, including mortgages and repayment history on credit cards.
Avant says it can offer those loans at a (somewhat) cheaper rate than what payday lenders might charge clients. The annual percentage rate (APR) ranges from 9 to 36 percent. The average loan size is $8,000, and recipients are required to pay off those loans over the course of two to five years.
The model has been demonstrably successful. Since inception in 2012, the upstart has issued $2 billion worth of loans over 400,000 transactions.
Goldstein met his co-founders, John Sun and Paul Zhang, while they were interning at his previous lending startup, Enova, which Goldstein ultimately sold to Cash America for $250 million in 2006. Sun and Zhang, who have been friends since childhood, share a certain fiscal savvy that piqued Goldstein's interest.
"John was the brilliant one that built all of our credit underwriting at Enova," Goldstein recalls fondly.
Some experts have pointed out that it may be difficult for Avant to continue acquiring customers inexpensively -- given the many existing client options in the marketplace.
Goldstein isn't too concerned, though. "We're finding that there's a tremendous amount of demand from consumers that have already been to brick and mortar stores, or aren't fully converted online yet," he says. To wit, he says the company has doubled its client base every six months since launching.
Over the next two to four years, he believes the Avant will go public. The company is also working to build out new products, including auto loans, mortgages, and student loans.
With the new heap of cash, Avant will focus on funding more loans on its own balance sheet, as opposed to the loans that it sources from investors. Goldstein says: "From a market perspective, we see almost no competition."