eProdigy, a fintech holding company with several subsidiaries serving the alternative finance space, announced today that an undisclosed private equity firm has made an agreement to provide $100 million to eProdigy through a term loan, a convertible note feature and participation rights.
“This deal changes our entire playbook. Previously, we were only able to focus on making merchant cash advances to higher risk merchants,” commented eProdigy CEO David Rubin. “Thanks to this new facility and our lower cost of capital, we’ll be able to target A and B credit borrowers, offer a broader range of products, and provide more competitive terms and rates.”
The convertible note portion of this agreement is a $20 million facility with the noteholder’s right to convert the full amount to equity at a $100 million valuation.
“This agreement evidences that eProdigy has achieved significant intrinsic value by building state-of-the-art technology combined with a top-line operational team that can enable us to continue reinventing the alternative financing industry and point the way forward for it,” observed eProdigy CFO Stephen Brown.
eProdigy plays a unique role as an enabling technology, serving the industry broadly — for the last three to four years, the fintech company was heavily focused on developing a leading edge technology platform on which it currently hosts many other funders and “white label” originators. Going forward, it will scale its origination activities and continue building out its infrastructure so as to handle the anticipated growth. It will also keep innovating so as to strengthen the enterprise value of the company and broaden its role as a source for other funders in the alternative space.
“Institutional investor appetite exists for alternative lenders with technology savvy platforms capable of scale and compliance. It’s those alternative lenders that will be best positioned to further reach into banks’ traditional territory,” viewed Dan Avnir, Managing Director of Bryant Park Capital.
eProdigy services the alternative finance industry through proprietary online platforms. Working with funders, ISOs, syndicates and brokers, the company provides tools that aim to allow its partners to manage their deals seamlessly. eProdigy’s companies include Capital Stack, 1Workforce, ACH Capital, eProdigyACH DBA ACHBanking, eProdigy Loans, and DailyFunder.