Online lender Elevate Credit, Inc. has decided to pursue an IPO, a little over a year after the firm had decided to postpone its listing in the face of the tough market conditions that made 2016 the slowest year for initial public offering in the last ten.
Conditions now are different, however, with investors looking for new issues — and the Fort Worth-based firm is ready to try and surf that demand wave.
Elevate’s central business is offering loans and lines of credit to customers in the U.S. and U.K. — and it is now coming at the public markets with a goal of raising around $124 million through the share sale, according to a regulatory filing.
That would put Elevate’s total valuation at about $487 million, or around 28 percent less than the maximum valuation Elevate was seeking last year. The more conservative valuation will run up interest in advance of the offering during the roadshow — which is, as of this week, officially underway.
Still, lending can be a tough place to go looking for investor love — a fact that LendingClub Corp. and On Deck Capital, Inc. can attest to as their stock prices are down 37 percent and 39 percent, respectively, over the past year.
But Elevate managed to stay above the fray in 2016 — revenue went up by about one-third to $580 million. The company reported a wider loss of $22.4 million last year thanks mostly to a 75 percent increase in borrowing costs.
Money raised through the IPO will be used to pay down outstanding debt owed to alternative-investment firm Victory Park Capital.
Early investors in Elevate include the venture-capital firms Sequoia Capital and Technology Crossover Ventures. UBS Group AG and Credit Suisse Group AG are the lead underwriters on the deal, according to the filing.