David Zalik takes big risks with GreenSky bet, sees big wins

Few people outside of the financial tech sector have heard of David Zalik. But the 44-year-old entrepreneur and former child prodigy is quickly becoming the industry’s superstar. Having founded GreenSky Credit back in 2006, the serial entrepreneur was able to grow his company with his own funds from a tiny startup to a major corporation with more than 650 employees that is valued at more than $4.5 billion.

Now, as Zalik makes waves over a possible IPO, many investors are drooling to get in on what may prove to be the most lucrative and opportune initial public offering that the fintech space has ever seen. But it wasn’t always this way. Back in 2006, Zalik, who, at that time, was running an e-consultancy firm, saw that many of his customers in the home-remodeling business had a problem. They were losing a large number of sales because customers with no experience in contracting or remodeling homes were consistently underestimating the true costs of completing projects. When these customers got bids that were $5,000 or $10,000 above what they were anticipating, the merchants would simply lose the sales.

Zalik conceived of GreenSky Credit as being a way to overcome those objections by offering prime-quality loans at great rates and on good terms. He funded GreenSky Credit with his own money, taking out loans on real estate, which essentially amounted to risking his entire net worth on the success of the company. But this would turn out to be a superb bet.

GreenSky was quickly able to bring on board 14 of the nation’s largest lenders. Banks ranging from Fifth Third to SunTrust were eager to sign on with a company that promised a steady stream of prime borrowers. Today, GreenSky Credit’s average customer has a FICO score of 760, meaning that the loans that the company originates rarely end up in default.

On the other end, the customers are able to get loans with astonishingly good terms. The typical GreenSky loan involves no payments for the first year and zero percent interest over that time. All told, GreenSky provides a model where everyone wins.


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