One of the most intriguing stories in the fintech industry has been that of GreenSky . The company was founded in 2006 by serial entrepreneur David Zalik. But unlike many of its competitors within the trendy and often-pretentious world of financial technology, GreenSky never promised to usher in financial utopia or to create a disruptive revolution in the way that banking was carried out. Instead, GreenSky was revolutionary in its very conservativeness. The company simply sought to use technology to do more of what was proven over generations to work. And that meant that the company was going to focus on creating loans for prime borrowers in value-adding industries.
GreenSky arose in the context of a fintech industry that was trying to brand itself as another offshoot of the high-tech trendsetting of Silicon Valley. While GreenSky’s chief competitors, OnDeck and Lending Club, were putting on dazzling conventions and giving talks in black turtlenecks about the coming era of unlimited credit for all, David Zalik and his company were busily working away to create a business model that actually made sense and worked.
Today, the fruits of those efforts are tangible. While OnDeck and Lending Club are currently burnt-out husks of their former selves, with each company barely clinging to life under the looming shadow of forced bankruptcy, GreenSky has become a ubiquitous loan underwriting powerhouse, operating across many different industries and currently soaring towards a $5 billion valuation. There has even been talk of a GreenSky IPO. The results are in. GreenSky is the fintech winner of the last 10 years.
When big money’s on the line, firms will pay to play
One of the most brilliant aspects of GreenSky’s model is how the company earns. Unlike so many other tech startups, from the beginning, GreenSky had a clear revenue model that worked. The company gets paid a flat fee by the retailer or contractor on every loan it underwrites. But that fee is included in the loan amount, so it is effectively hidden from the consumer. GreenSky also gets a yearly cut of all loans on its lenders’ books.