David Zalik is the CEO and co-founder of the incredibly successful GreenSky Credit, a lender specializing in business loans used to help companies grow and homeowner’s achieve their dreams. This powerhouse company was operating from David Zalik’s basement where it has grown to boast a $3.6 billion dollar valuation. Today, David still owns over half of GreenSky Credit, which has propelled him to incredible wealth.
A Unique Approach
One of the reasons why GreenSky Credit is so successful is because of their unique approach to business. They are able to harness the power of third parties to do all of the labor-intensive work, while they are able to cash in on the profits from the endeavor.
In many instances, GreenSky Credit enlists the help of home contractors to market the loan to the homeowners. GreenSky then obtains funding from any of their 14 different partnering banks. GreenSky makes a profit from a percentage of the loan amount and also is paid a percentage of the yearly balance of the loan through the funding bank. Essentially, GreenSky is paid to service and generate the loans for the banks. They are the middleman between the homeowner and the bank while working through the contractor.
GreenSky Credit has managed to capitalize on a niche they created and has generated 1.2 million customers with unsecured loans since the company began in 2012. Estimates of performance by market experts predicted that the company would see in excess of a 25% profit margin, which is partially based on their performance in the last 5 years.
David Zalik’s vision for his company and a groundbreaking approach to lending has created a healthy environment for his company to continue to prosper. He started from humble beginnings assembling computers in college to working his way up to becoming a business visionary with his sights set on the future.
Forbes recently published Lauren Gensler’s article “Why it’s No Surprise that Online Lender GreenSky Would Weigh an IPO’. The article discusses the financial technology company that is provides a service to both banks and merchants by becoming the technological middleman for home improvement loans.
However, the company focuses on remaining distinct from other technology companies. The CEO and co-founder David Zalik remains shy with the press, rarely accepting invitations to speak at conferences. He refused to raise external capital for nearly ten years. His opinion also contrasts with other companies in Silicon Valley that staying privately held for longer is better. GreenSky Credit recently filed for an IPO.
GreenSky Credit could raise more than $1 billion according to the Wall Street Times and it has been valued at nearly $5 billion. Zalik doesn’t want to go the same route as companies like Credit Karma, Stripe and Uber that all put off going public for as long as they could. They wanted to stay away from the pressure of investors and the demands of quarterly earnings.
However, GreenSky Credit could still determine that they do not want to go public and will not have an IPO. They filed their paperwork confidentially with the Securities and Exchange Commission. By doing so, Zalik has let the company prepare for going public, if that is what they end up doing, in private.
David Zalik co-founded GreenSky Credit in 2006. The company is based in Atlanta, Georgia but it has been expanding its network of call centers to places in Cincinnati and Kentucky. It has more than 900 employees and the CEO David Zalik was even named as the National EY Entrepreneur of the Year Award in Financial Services.
The company works by replacing credit cards for larger spending and consumer projects like home improvement. They have a fixed-interest rate and a fixed period in which the customer must pay back the loan. Zalik revealed that the company is not attempting to compete with banks, but rather to help them. By partnering with more than 14 national federally and state chartered banks, they are able to help the banks make more loans.