Elevate: Reinventing Non Prime Lending

Author: Adi Bachar-Reske

The first slide of the May 2017 Elevate Investor Presentation is the type of thing to make investors’ ears tingle. President and CEO of Elevate, Ken Rees boasts over 15 years in the financial services industry and has a big exit to GE Financial under his belt. To his right is displayed Chris Lutes, Elevate CFO whose career path journeyed through PWC and the CFO role at Silicon Valley Bank. With the vision of a strong leadership team and a fresh IPO, Elevate is determinately reinventing non-prime credit with online products that provide financial relief today, and help people build a brighter financial future.

The vision statement is emotive, and the numbers are unavoidable. The Elevate portfolio of lending products – Rise and Elastic in the U.S., Sunny in the UK – have originated over $4 Billion in non prime loans. The company’s revenue CAGR stands a tall 100% over the past three years, they’re reliably increasing margins, and they’ve done it all with an 85%+ customer satisfaction rating.

Tech-forward and Customer Focused

Elevate has succeeded in a tough segment, many say, because it has identified its purpose and it works with focus to serve what Elevate has termed “The New Middle Class” — the roughly 170 million residents of the U.S. and U.K. with low or no credit scores who would otherwise turn to short term lenders in the event of a significant, unforeseen expense. Elevate is serving the group that’s sitting between prime and sub-prime, but it is not doing so as a traditional lender – it’s a self-proclaimed fintech that hails “Datascience as the vanguard” of its efforts.

A recent NYSE.com article pointed out that “Elevate’s speed is one of its key advantages,” touting the ability “to approve most loans within seconds while staying on the right side of compliance” (a process which is ~95% fully automated).  To which Eric VonDohlen, SVP Chief Analytics Officer, added: “If we start to see things in data we don’t like, we can react in days, not months, and still conform to all the governance requirements.” Elevate’s goal in its data refinement is to shrink charge-off rates, a challenge for many in the non-prime space.

Overall, Elevate is positioned as a growing, tech-forward, and responsible alternative to subprime lenders and has established for itself a significant competitive advantage through its data and analytics stack. Elevate has only “touched about one percent” of its target market, and is not stopping now.

In June 2017, Elevate announced the launch of Elevate Labs. “Given the state of consumer credit in America today, the need for innovation in credit scoring has never been greater: approximately two-thirds of Americans are non-prime according to the Corporation for Enterprise Development and FICO and need better credit options,” said Ken Rees, CEO of Elevate. “Our new innovation lab in San Diego gives the best and brightest technology and analytics talent the space to experiment, collaborate and create something that has the potential to change Americans’ financial lives.”


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