Check out an exclusive Q&A from Al Goldstein, Avant CEO and Founder. We would like to thank Avant for being a 2016 sponsor of The Montgomery Summit. Check out Avant’s presentation on Wednesday, March 9th at 1:30pm.
1. Tell us about your role at Avant.
Three years ago I founded Avant with my two co-founders, John Sun and Paul Zhang, who now serve as Avant’s Chief Credit Officer and Chief Technology Officer. As Chief Executive Officer I oversee Avant’s strategic vision and have guided the company on its journey to becoming one of the biggest players in the online lending space. Our mission focuses on lowering the costs and barriers of borrowing for middle-class consumers and to date, we’ve served 440,000 customers. We know there is a large demand in the market for our product but there are many obstacles we must effectively address on a day-to-day basis to ensure business runs smoothly, including but not limited to, access to capital, accurately pricing risk and customer acquisition.
2. As a FinTech company, how does Avant foster innovation?
While many lenders are leaning towards moving operations online, few have done so in a way that is impactful to the middle-class consumer, which represents nearly 40 percent of Americans. This new crop of online lenders has predominately focused on super-prime or sub-prime consumers rather than the huge middle-market. Avant has brought innovation to the space by using advanced analytics and credit modeling in the underwriting process, resulting in more affordable and streamlined access to credit for a huge segment of the population.
3. Are there any big milestones coming up for Avant in the next year?
Avant recently just crossed the $3 billion in loan originations milestone which is a huge accomplishment in three years. In the year ahead we expect to double our loan portfolio and grow our customer base through new product offerings including direct to consumer auto refinancing and credit cards.
4. What is Avant’s growth plan for the next 5 years?
We believe Avant has the ability to become a massive player in the industry; our core products are filling a void in the market and are serving an unmet demand. Over the next five years we will expand our product offerings, launch in new geographies and continue to scale the company. Our goal is to build a transformative business that is the preeminent provider of credit to small and middle-income consumers.
5. Where do you think the FinTech industry will go in the next 5 years?
The current climate of the capital markets is going to affect a plethora of startups in the year ahead as access to capital becomes tougher to secure. We are likely to see a growing divide between the more established lending platforms and the smaller lending platforms as it will be harder for these smaller platforms to compete.
6. What would an economic downturn mean for your business?
The financial markets are cyclical so it is only a matter of time before we hit another economic downturn. We built Avant thinking about what would happen in the event of a recession so when the market conditions change, we will be well-positioned. We are one of the few lending platforms that hold loans on our balance sheet and have skin in the game. The depth of our resources, strength of our team and operations as well as our proven track record leave us well-prepared for the current climate.
7. Do you think any FinTech players at The Montgomery Summit this year will start displacing big banks?
The term that comes to mind for 2016 is innovation rather than disruption. There are likely to be more partnerships between FinTech companies and longstanding financial institutions rather than startups shaking up the industry alone. There is massive opportunity within the credit market for companies to operate separately as well as engage in partnerships. Financial institutions can greatly benefit from the technology FinTech companies are putting forth.