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Avant

Avant – A Fintech Company That Started As A Product Of The Y Combinator Startup Program.

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Avant is a financial technology company based in Chicago, Illinois, US. The company was formerly known as AvantCredit and was established in 2012. Avant mainly focuses on two primary products, personal loans for middle-income borrowers and Avant Credit Card which come with a credit limit of $300 to $1000. The grew as AvantCredit and created a very strong brand name for customer lending services. The founders of Avant are Al Goldstein, John Sun, and Paul Zhang. Avant is a very young company and currently, it serves customers in the US and the UK only. It is a private company with 550 employees and the CEO of the company is Matt Bochenek.

About Avant

Founded in 2012, Avant’s target was to provide loans to customers who belong to the middle-class tier of our society. These are the people that need help with home improvements, high-interest debts, etc. Avant grasped the market so quickly that it is one of the few Chicago-based startups that has gained unicorn status and is still a privately-held company. Avant’s valuation has nearly touched $2 billion. In 2013, the company issued its first personal loan and used its propriety technology to determine a person’s creditworthiness.

There are various factors that help Avant determine the amount, time, etc at which the money can be borrowed. From machine learning protocols to various analytical tools, Avant rigorously checks a customer’s profile. Avant has also built a fully online process for its customers to eliminate the need for several physical branches and simplify the overall borrowing process. The company is supported by numerous big investors like Tiger Global, August Capital, General Atlantic, Victory Park Capital, etc. When the company began offering loans, it just started with 16 states but soon expanded to Canada and the UK.

Avant
Image source: www.avantcorp.com

Story of Avant

Avant’s customer base includes those people who generally don’t get loans from regular banks but at the same time have decent enough income to repay loans at sizable interest. This is the reason Avant’s technology determines a person’s creditworthiness in every way possible. In 2012, two of the Avant’s co-founders Sun and Zhang were looking forward to building their business, Debteye after graduating from the Y Combinator startup program. The business was about designing a platform that would help individuals manage debts after analyzing their unique financial situation.

In the pursuit of opening a business, Sun decided to take a personal loan from a traditional brick and mortar establishment because he had no income. But, he found that the entire process of applying and the loan getting sanctioned is very time-consuming and inconvenient. So, with the idea of the new venture combined with finding a solution to smoothen the process of loan sanction, Avant emerged. Sun and Zhang were former interns of Goldstein, seeing this as an opportunity they built a product in December 2012. Avant had a very strong financial backup from the beginning as it raised $1 million in seed funding. Within the next three years, the total funding of the company touched $1 billion.

Success

Avant received a lot of awards and recognitions only within a few years after it issued the first loan. In 2015, the company ranked 6th in Forbes America’s Most Promising Companies and in the Forbes Next Billion-Dollar Startups. Paul Zhang, the co-founder and the Chief Technology Officer of Avant was featured in Inc Magazine’s 30 Under 30 list. In the same year, the company also acquired ReadyForZero, a debt management platform, and rebranded it as Avant. In 2014 company successfully raised $225 Million in equity between Tiger Global Management, Peter Thiel, and KKR. But only after a year of the acquisition, Avant announced the shut down of ReadyForZero’s credit score and debt planner tools.

Matt Bochenek – CEO of Avant

Matt Bochenek joined Avant in 2013 in the Strategy & Operations department and after that served in many other roles. He became the CEO of the company in May 2021 and before that served as the COO for one year. Before joining Avant, he worked at Superfund Asset Management as the Managing Director of Business Development and Strategy. Matt went to the University of Chicago.

Wise

Wise – A Multimillion-Dollar Fintech Company That Emerged Out Of A Sudden Plan.

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Wise is a young fintech company based in Shoreditch, England. Kristo Käärmann and Taavet Hinrikus founded the company in 2011. Earlier in 2021, Wise went public through a direct listing on London Stock Exchange and it was valued at $11 billion. The journey of Wise refers to one of those stories when two people meeting at a party started talking about their life problems. From figuring out a viable solution to making millions in revenue, Wise has achieved massive success in ten years. The company also received an impressive amount of funding since 2011 which could be because both the founders were already established in their professional careers.

The Idea Behind Wise

Kristo Käärmann and Taavet Hinrikus both were living in London when they met in 2007. The two co-founders started a conversation at a party only to realize that they share a common problem. Both Kristi and Taavet send money back to their home countries and every month they need to convert the currency. Taavet used to convert his Estonian salary to pounds whereas Kristo converted his salary to Estonian kroon for paying his mortgage. So, initially, these two fellows devised a solution that was exclusively for both of them. Every month Kristo topped up Taavet’s bank account, setting the amounts according to the mid-market exchange rate while Taavet did the same for Kristo. This arrangement helped them make big savings but none of them decided to open up a company.

After Kristo and Taavet made arrangements for themselves the word traveled fast to other Estonian experts. Due to the huge amount of savings that came with the idea, they turned it into a business without any plan of doing it in 2007. In 2011, they officially established this money-exchange forum and it was called TransferWise. The business started flying only after 15 fifteen minutes of TechCrunch publishing an article. Kristo said that the transactions never stopped.

Wise
Image source: www.gavi.org

Executing The Plan

When Kristo and Taavet came up with this idea of overseas transfer, they were both working at different companies. In 2011 they decided to quit their jobs and for the first year, they self-funded the company. The company eventually started attracting many investors that also include the famous billionaire, Peter Thiel. Today, the company processes transactions for more than ten million active customers who save around $1.5 billion every year that goes as bank fees. The first year when Wise operated, the total amount from the transactions summed up to €10 million. The company gained popularity so fast that after a year it was named “East London’s 20 hottest tech startups.”

In 2012 the company was featured by several big magazines as one of the top startups in the country. Till 2013 the company also allowed its users to purchase bitcoin but due to pressure from banking providers, it was discontinued. The same year, a comparison site called Monito revealed that transactions in Wise are 83 cheaper on average as compared to big banks of the UK. In 2015, the company also made it to the top 10 on CNBC’s 2015 Disruptor 50 list. Later in 2015, Wise was named World Economic Forum Tech Pioneer. In February 2021, the company rebranded itself Wise from TransferWise. This rebranding wanted to reflect on the fact that the company has expanded its services as it goes beyond just international money transfers.

About The Founders

Kristo Käärmann is the famous co-founder of an extremely successful startup called Wise (earlier TransferWise). He studied mathematics and computer science and started his career as a consultant at PwC. Before co-founding Wise with Taavet Hinrikus, he worked at Deloitte for more than four years. He is also the current CEO of Wise, which filed its IPO in 2021.

Taavet Hinrikus is a famous entrepreneur and investor who started his career at Halo Interactive DDB. It worked at several companies before co-founding Wise that also includes being the Director of Strategy at Skype. After he and Kristo came up with the solution of overseas transfer, he spread the word on Skype which helps them gain a potential customer base before officially launching the company.

Afterpay

Afterpay – A Young Australian Fintech Startup To Secure More Than 7 Million Active Customers Internationally.

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Nick Molnar and Anthony Eisen founded Afterpay in October 2014. It is a very young start-up that has its origin in Australia and eventually expanded to the UK, Canada, the US, and New Zealand. The company changed its name from Afterpay to Afterpay Limited in 2019 and currently Square Inc, an American digital payment company is planning to acquire it. It is a mutual agreement between the two companies the deal is planned to be settled by 2022 for $29 billion.

Afterpay limited is a fintech company and currently, it has over 7 million active customers with the majority of it in the US and Australia. Afterpay went public only after two years of its established and its stock price has increased rapidly in the last five years. In 2016, the company got listed in ASX with an IPO valued at $25 million. The business strategy of Afterpay is what makes it one of the most successful and youngest fintech companies today.

Founding Of Afterpay

Nick and Anthony founded Afterpay back in 2014 as a financial payment for shopping purposes. The product developed by the company allowed customers to pay in an installment-based system and thus approached the audience in a “buy first, pay later” approach. Afterpay offered several plans on how customers can repay the money in installments. With Afterpay, the retailers didn’t have any requirements to track the repayments of customers and in return, the company charged a small fee based on the transaction.

Before rolling out the platform, Compay fully built its digital strategy and also established a partnership with Touchcorp, a payment firm. Touchcorp was also one of the early investors of the company and supported the entire back end of Afterpay’s payment system. In 2017, both the companies were merged and a deal of $500 million was successfully closed with renaming the company Afterpay Touch.

Afterpay
Image source: www.uniquenewsonline.com

Success And Expansion

Afterpay was able to secure millions of customers in a very short time and the company’s valuation also started escalating. In 2016, the company decided to go public and thus got listed on the Australian Securities Exchange with an IPO of $25 million. By this time, Company established a very strong customer base and an efficient payment system. This brought Afterpay on the radar of investors and 2018 American venture capital firm Matrix Partners showed interest in the company.

Matrix Partners was willing to invest $19.4 million to help the company enter the US market. With this funding, Afterpay successfully entered the US market in mid-May of the same year with retailers like Urban Outfitters, Free People, and Anthropologie. After one year of entering the US market, Company raised a fresh fund of $317.2 million and it was invested exclusively in the company’s international growth. In mid-2019, Afterpay announced that it has crossed two million active customers in the US and has 6,500 merchants using their payment system. The same year, the company also entered into a partnership with Visa Inc and that hugely broadened the customer base of the company. Last year Company reported that from two million customers in 2019 it has crossed more than five million customers last year.

In August 2018, Company acquired a 90% stake in a UK-based company Clearpay. This company also offered the same service as Afterpay and the deal was closed for one million Afterpay shares. With this acquisition, Company entered the UK market and it landed 200,000 customers only in the first fifteen weeks. Last year, due to the COVID-19 pandemic, everyone witnessed a rising demand for online shopping. Afterpay, in order to capitalize on the e-commerce surge, showed its interest in expanding to other continents including Asia. Thus, the company is planning to acquire more Asian-based payment companies.

About The Founders

Nick Molnar, born in 1990, is the youngest self-made Australian billionaire. Nick went to the University of Sydney and has a bachelor’s degree in commerce. He is mainly famous as the co-founder of Afterpay and after the company is acquired by Square Inc he along with Anothony is to receive $2.7 billion in Square stock.

Anthony Eisen is the co-founder of Afterpay and also the current CEO of the company. He completed his education at the University of New South Wales. Eisen has more than 20 years of experiencing in leadership and investing in financial services and technology.