GreenSky, a FinTech company from Atlanta that provides loans for home repair projects, has announced its plan to go public with an IPO of USD 5 billion in total capitalization valuation. The move flies in the face of conventional Silicon Valley thinking that holds that the longer a company can remain private, the better it will be.
GreenSky offers loans to customers via a smartphone app and informs them about the loan decision within seconds. The secret of GreenSky’s success is that the company transfers most of its risk to banks, working with partner banks like SunTrust, Regions and Fifth Third. As such, it is essentially protected from default. This model has become much more attractive to investors in the online lending field in recent months following recent drops in the value of shares from traditional online lenders like LendingClub and OnDeck. In fact, Greensky has maintained tremendous stability where other online lenders have struggled. For example, its revenue in 2017 was USD 250 million, and its revenue for 2018 is expected to exceed USD 400 million.
It should be noted that GreenSky can change its mind and refuse to move forward with the IPO, even after submitting necessary documentation to the Securities and Exchange Commission.