GreenSky Inc. has recently gone public shortly after filing with the SEC.
It has now surpassed OnDeck and LendingClub as the largest IPO in America. In hopes of raising $874 million, the company is selling 38 million shares at $23 per share. Experts estimate that the company’s points could be valued at $4.4 billion.
GreenSky credit lenders act as the middlemen between potential borrowers and the lender. The company has built strong relationships with health care providers, home improvement companies, and banks. These relationships help the company maintain steady and consistent growth. The company anticipates potential risks in the future. For example, established payment giants such as MasterCard and Visa could replicate its business model. Its low-risk business model and the low barrier of entry into the industry make GreenSky vulnerable to competition.
However, the company’s longevity and established reputation within home improvement has made it difficult for new businesses to get their foot in the door.
This might be the reason why the company has had such a high level of success in such a short amount of time. Between 2015 and 2017, GreenSky has had a 50 percent increase in merchants using its platform. Experts forecast that this number will continue to grow at a similar rate during 2018.
CEO David Zalik is the brains behind Greensky credit company’s massive success.
Unlike the majority of successful business owners, Mr Zalik has kept out of the public eye and is refreshingly humble. Originally, he raised all funds for the business single-handedly, and only began to seek outside help in 2014. In recent months, GreenSky has raised $560 million from organizations such as PIMCO, Wellington Management, and TPG.
As a child, Zalik had an above-average level of intelligence. He enrolled in college at the age of 14, but dropped out a year later to start a computer assembly company called MicroTech. At 22 he sold the business and became a multi-millionaire. It’s clear that Zalik has the ability to spot trends early on. One of the main reasons he decided to expand GreenSky was because of increased healthcare costs and the aging baby boomer population.
GreenSky allows the public access to its stocks, which is the opposite of what privately funded organizations such as Stripe, Uber, and Credit Karma do. Many private companies don’t provide access to investors and shy away from quarterly earnings. By going public, Zalik is shifting some of the responsibility that comes with owning a private company.
GreenSky credit company has made its mark in the industry because, unlike other fintech organizations such as Social Finance and The Lending Club, they do not provide loans with their own capital. Rather, they place all the risk and responsibility on their partner banks. Overall, experts seem optimistic about GreenSky’s decision to go public and agree that, whatever Zalik’s strategy is, it seems to be working.
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