Consumer lending platform Avant is giving pink slips to 60 employees, or about 7 percent of its workforce.
The news came late last week amid what Crain’s Chicago Business said is “an abrupt negative turn in investor sentiment toward consumer lenders of all stripes.”
The downturn is leading the online lender to walk away from previously held plans to expand beyond consumer loans to credit cards and also refinancing of auto loans. The plan to expand geographically, into Australia, has also been shelved.
Rather than continue with those plans, the firm is looking to turn its bottom line from red to black and will continue its efforts in the United States and the United Kingdom, as confirmed to the outlet by Chief Executive Officer Al Goldstein. The executive said in an interview, in reference to beleaguered Lending Club: “Our biggest competitor just fell down, and the whole space is at an inflection point.”
As has been widely reported, Lending Club’s shares were decimated earlier this month in the wake of news that the firm had sold loans to Jefferies that did not conform with the latter’s standards for investments.
Avant’s CEO said that, despite the challenges confronting the landscape, Avant itself is well-positioned to thrive. The firm is on track to grow revenue by between 50 and 100 percent this year, with net income to be positive next year.
In the meantime, the firm will be offering credit cards to near-prime consumers, eventually, with the auto refinancing also to eventually come down the pike. And, over the near term, the goal is to establish bank partnerships beyond the one seen last month with Regions Bank, through which Avant can serve customers who come through Regions’ site and do not meet the bank’s lending criteria.
In the latest quarter, loan volume was $514 million, which was off 27 percent sequentially and is the first sequential slip since the firm’s founding.