The Fintech firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission.
The Atlanta fintech company is planning a sizable initial public offering that could come as soon as this summer.
GreenSky operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers. They could seek to raise $1 billion at a valuation of roughly $5 billion.
There is no guarantee GreenSky will proceed with an #IPO. It may do another private share sale instead of a listing.
Despite the large amount of financing that private investors have poured into lending startups, IPOs have been rare in recent years. This has been due in part to concerns around rising default rates among their borrowers and increased competition.
Furthermore, fintech companies that have tapped the public markets have struggled. Shares in online lenders LendingClub Corp. and On Deck Capital Inc. were recently down 86% and 77%, respectively, from their IPO prices.
Wall Street investors have been wary of LendingClub and On Deck Capital. However, GreenSky’s business model has clear distinctions. Unlike those companies, GreenSky doesn’t make loans directly. It arranges financing of up to $55,000 for customers of home-improvement retailers such as Home Depot Inc. and over 16,000 other merchants and service providers. GreenSky operates through alliances with lenders. A network of banks, including Fifth Third Bancorp, SunTrust Banks Inc. and Regions Financial Corp., fund the loans and hold them on their balance sheets.
A successful IPO of GreenSky could encourage a host of fintech companies that have been weighing public offerings to move forward.