With massive equity and debt financing of $ 275 million, the next-gen loan company Serious now has the firepower and strategic partners to become a more complete financial services company.
The lending segment of the financial services industry has been one of the areas that has generated the most interest from venture capitalists with mature companies like SoFi raised a whopping $ 1 billion from Softbank Capital earlier this fall and younger lenders like CommonBond raised $ 35 million over the same period.
Earnest’s $ 75 million of equity was led by Battery Ventures, and the company received an additional $ 200 million in debt from a syndicate of mostly undisclosed insurance companies run by New York Life.
The Earnest cycle is just another drop in what has been a huge volume of investing for FinTech companies. In total, more than $ 11 billion has been invested in a fintech services company, according to CB Insights. This is more than $ 5 billion more than the previous year and the highest amount invested in financial services technology companies in the past five years.
According to Earnest chief executive, Louis Beryl Earnest lends between $ 2 million and $ 5 million per day and the total dollar amount the company has loaned has increased 50-fold in the past year. On average, the company’s loans are around $ 70,000 and Earnest’s workforce has grown from 30 to 160 since Earnest raised its $ 19.8 million Series A from Maveron earlier. during this year.
Of its products, Earnest’s student loan business is the largest, followed by its personal loan business. Loan activity for coding academies completes the pack. Interest rates on Earnest products are the same as on other online loan products, according to Beryl, but the company’s technology allows users to save money on their payments. “The average person saves $ 18,000 with Earnest,” Beryl explains. “The best we’ve seen is $ 14,000.”
Accurate pricing gives clients flexibility, they can choose their monthly payment and give them a lower interest rate accordingly, Beryl told me.
Beryl said the company plans to hire 200 more people over the next year as it rolls out a mobile version of its loan tools.
“One of the things we believe about the future of finance is real-time connected accounts using software and data [can] reduce costs, ”says Beryl. “Today we do it by lending. As we build our platform, it could be in financial planning, or it could be in financial education. “
People familiar with the company’s plans say Earnest could use its lending business to expand into other markets. “The market opportunities for what we are building are truly limitless,” says our source. “Whether it’s saving for the future, paying for your education, or living your life and managing your life in a financially responsible manner. “