Online lender Elevate is heading for an IPO

pulse

March 27, 2017 2:39 PM

Elevate Credit, an online lender that focuses on riskier borrowers, is headed for an initial public offering.

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The company is offering 7.7 million shares at $12 to $14 each, it said in an updated filing on Monday. It has also put aside 1.15 million shares that the underwriters have the option to purchase. At the top of the range it would raise about $124 million.

The company plans to list its shares on the New York Stock Exchange with a ticker of ELVT. UBS is leading the deal with Credit Suisse and Jefferies.

The company attempted an IPO back in early 2016, but it decided to hold off.

"When we began our IPO process over a year ago, we told you we would grow revenue and profits throughout 2016, while continuing to provide the most responsible credit products in our space," Elevate CEO Ken Rees said in a letter in the company's S-1 filing. "In fact, we improved the company in almost every way."

Here are the key details on the company's financials:

Rees said in his letter:

"In 2016, we grew revenue by 34%, loans outstanding by 30%, and operating income by more than 400% over the prior year. While we have not yet reached profitability, our principal charge-off rates have remained stable while our customer acquisition costs have continued to come down. Just as important, we ramped up our commitment to serve our customers and help them improve their financial wellness. We have lowered our average customer effective APRs over 40% since 2013 and we estimate that our customers have now saved more than $1 billion since 2013 over what they would have paid for payday loans. Furthermore, tens of thousands of our customers have appreciably improved their credit ratings with help from our reporting their successful payment history to a major credit bureau.

"How did Elevate thrive while so many other online and marketplace lenders struggled for funding, growth and profitability? We believe it is because of our steady focus on serving the vast and underserved segment of approximately 170 million non-prime consumers in the US and UK who are seeking better financial options. We call them the “New Middle Class.” Our customer is typically deeply frustrated with traditional banks, which have ignored their need for access to credit, fair pricing, and a path to lower rates and better credit. Even though non-prime consumers now outnumber prime consumers in the US, most fintech investments and innovation have largely focused on providing credit to prime consumers who are already swimming in it."

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