Sacramento fintech company Acorn Finance is growing quickly with its technology that puts home improvement loans within instant access to contractors and homeowners. The company saw revenue grow 800% last year, and it's raised more than $12 million from national investors.
But that’s not enough for founder and CEO Giri Addanki, who keeps adding features and speeding up onboarding processes for clients and partners.
The Acorn app allows contractors to make more money by getting nearly instant financing for home improvement loans. Using Acorn costs them nothing, so they are motivated to use it, Addanki said. Lenders pay an origination fee on loans they close.
The platform can show a path to financing in seconds because it accesses pre-qualified offers from a network of lenders, ranging from other fintechs to finance companies. The company has grown from six lenders last year to more than a dozen now, and it's also expanding from its roster of mostly finance companies to also serve banks and credit unions. Addanki started with finance companies because they generally have better technology than traditional banks, and they are more open to using new technology. Addanki knows this because he previously worked in banking and finance for 20 years.
Addanki was born in India and grew up in New Delhi and Mumbai. Addanki's father was a career government employee working in India’s tax service. His father encouraged him to pursue accounting, because his father admired the careers of the accountants he worked with in the tax service. Addanki, who always liked math, took the advice and became a chartered accountant, the Indian equivalent to a CPA in the U.S., and went to work for Ernst & Young in India and the U.S.
“After being in accounting for a while, I grew bored with it. It is always a post-mortem. Something has happened, and you are accounting for it after the fact,” he said.
Seeking a change, Addanki went back to school to study international business at the University of South Carolina.
“Business is much more active," he said. "You get to make decisions.”
But, Addanki adds, he still uses his accounting background on a day-to-day basis.
After graduating with an MBA in finance, he went into banking at national and global operations in Virginia, Delaware and New York City, always running analytics on the lending side. A lot of that work included calculations on the sales cycle and life cycle of consumer lending products. At the large national banks, consumer lending for personal loans and credit cards is all based on modeling. Addanki’s role was often figuring out in advance the cost per customer acquisition, which also determined who to market to and how to do that marketing. That meant delegating budgets to either advertising or to direct mail marketing.
On the side, he built a decision engine for family meal planning. He quit his job in Manhattan to come to California to be close to Bay Area investors and to launch a startup digital meal-planning tool that took into account nutrition, allergies, likes and dislikes, and then coordinated it with recipes and grocery lists. It became Mindful Meal.
"He's an awesome entrepreneur, and he's a brilliant guy," said Todd Michaud, who worked with Addanki on that startup. Michaud is now CEO of artificial intelligence software company HuLoop Automation Inc.
After living in California for a year, Addanki started doing consulting work for banks and financial companies. That got him into the space of using point-of-sale applications for home improvement loans. The technology worked, but the target customers — homeowners — weren’t using it.
Addanki thought about it and realized that the ideal customers for such a platform weren’t homeowners but the contractors who do the work. The contractors could offer their homeowner clients instant access to the POS platform, and then the homeowner could choose the lender.
“I saw an opportunity to develop an embedded lending marketplace,” he said. “I saw a way to make it far more seamless.”
That thought led to the launch of Acorn Finance in 2017. It began with the loan app that contractors could use to get their homeowner customers financing. He put Mindful Meal on hold and ran with Acorn. Then, to scale Acorn, Addanki started reaching out to contractors’ groups and technology providers to get endorsed to their thousands of members and clients. Now Acorn is running pilot programs with real estate agents and brokers in a program that can fund house and landscaping upgrades that can help the homeowner get a top price, Addanki said.
“There are a lot of cases where if you spend $10,000 to fix the roof or paint the house or make it look better, it will sell faster and the owner can make more money.”
The Essentials
CEO and founder, Acorn Finance
Education: Chartered accountant from the Institute of Chartered Accountants of India, 1995; MBA in finance from University of South Carolina, 2000.
Career: Founder and CEO, Acorn Finance; founder, Mindful Meal, 2015-2017; strategy director, CitiMortgage, 2010-2012; product strategy group director, Barclays, 2007-2010; marketing analysis and product development, Capital One, 2002-2007; eBusiness consultant Cisco Systems, 2000; various titles, Ernst & Young, 1992-1998.
Personal/family: Divorced, two teens, lives in West Sacramento.
Passion (outside of work and family): Travel, hiking, outdoors.
First job — nonprofessional: Taught accounting and math to high school kids as a side hustle while in school.
