Elevate Credit, an online lender in the payday loan space, decided to hold off on its IPO last week as the realities of an exceptionally volatile market gave pause to management. Elevate CEO Ken Rees stated;
“Although the response to the marketing of our planned IPO has been very favorable, we recognize that the current market volatility makes it very difficult to price our offering at present. We will continue to evaluate the timing for the offering as market conditions develop. We believe our strong growth to date, and our responsible online credit products, make Elevate an exciting opportunity that we look forward to bringing to the market.”
Elevate is backed by Sequoia and Technology Crossover Ventures. Currently, Elevate operates three different products including; Rise, Elastic and Sunny.
Rise is an online payday lender that provides loans for those consumers who have little access to credit. Elastic is an unsecured line of credit platform. Sunny is a UK direct lender for short-term consumer loans. According to Yahoo, Elevate’s revenue for 2015 totalled approximately $434.
Elevate would have been the first FinTech IPO of the year. Expectations were for Elevate to raise around $79 million. The IPO will most likely return once the markets regain their footing in 2016.
Payday lenders have traditionally been associated with very high-interest rates for borrowers and, at times, very challenging terms for consumers. Elevate considers itself “different” and promotes their interest rates, while high, as being far better than many other payday loan operators.
There have been ongoing rumblings about additional regulations regarding all direct lending platforms. There has been some concern that marketplace lenders may get rolled into any new regulations as regulators target platforms that charge very high rates of interest or incorporate punitive borrowing terms.