Chicago online lending startup Avant's first three years were a dream for any tech company. It raised hundreds of millions of dollars in equity on its way to a roughly $2 billion valuation, quickly rose to one of the city's most noticeable startups as it became Chicago's fastest growing tech company since Groupon, and it moved into a brand new 80,000 square foot workspace in the Loop.
But last year Avant hit a major speed bump. Investors began to cool to the online lending industry as regulators proposed new federal restrictions on the sector, and as Avant competitor Lending Club experienced its own struggles and scandals. Avant laid off 60 workers in May, and cut its workforce again in July by offering voluntary severance packages, which hundreds of employees took. It scrapped plans to offer auto loan and credit card products, as well as plans to expand into Australia.
Today Avant has 600 employees, down from 900 at its height. But now the startup is doing something for the first time since its tumultuous 2016: growing.
Avant is currently working to hire 25 technologists--mostly data scientists and developers--and add some additional customer service roles after that. It's a modest uptick compared to the feverish growth the company experienced in its first years since launching in 2012, but a sign that the company is down, not out.
"We were running really fast last year. We had three years of unbelievable success," Avant President Adam Hughes said. "Some industry waves hit us ... It really wasn’t anything we did. Some competitors got hit hard and investors pulled back from the space.
"We slowed down. We took the opportunity to refocus on three core initiatives."
These initiatives include growing Avant's core lending product, partnering with more brick-and-mortar banks, and launching the credit card product it put a pause on last year, Hughes said.
Avant did $1.5 billion in online loans last year, and today it's doing around $75 million a month. The goal is to get that to $200 million per month, Hughes said.
Last April the company announced a partnership with Birmingham, Alabama-based Regions Bank that allowed the bank to offer same-day or next-day loans using Avant's technology. Working with brick-and-mortar banks helps Avant gets its products in front go more customers, and it expects to announce a deal with its second bank in February. Avant's goal is to be working with five banks by the end of the year, Hughes said.
Hughes added that Avant plans to launch its credit card product in August, and down the road it expects to debut an auto loan and mortgage product, and expand into Australia and Canada.
Despite a rough year in 2016, Hughes said that the company hasn't had any trouble finding quality talent to fill its new roles.
"Despite some challenging headlines last year, Avant seems to still have a really great reputation in the tech community," Hughes said.
Hughes said Avant doesn't plan to raise any more venture capital until next year, and added that the company expects to be profitable in the first half of 2018.
Images via Avant
