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Credible Sells Majority Stake to Fox Corporation for $265 Million

Lending marketplace, Credible Labs, has reached a deal to sell 67% of the company to media giant Fox Corporation

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There is some big news out of Australia today. Credible Labs, based in San Francisco but listed on the Australian Stock Exchange, has reached an agreement with Fox Corporation (yes, that Fox) to sell 67% of the company for $265 million. This values the company at $397 million which is a 31% premium over the stock’s closing price on May 28, the day before receiving the offer from Fox. Fox Corp. will also provide $75 million in growth capital over the next two years.

Founder and CEO Stephen Dash (you can listen to my 2016 interview with him here) is an Australian who moved to San Francisco in 2012 to start Credible. He will remain head of the newly formed Fox subsidiary and will exchange shares equal to 33% of Credible’s outstanding common stock into units of this subsidiary.

I sent Dash a message last night but he did not respond by the time of publication. However, he did say this in the press release:

Fox Corporation’s record of innovation and focus on audience engagement will further enhance Credible’s position as a leading consumer finance marketplace in the United States, creating opportunities for organic growth and the expansion of the Credible platform. Credible’s industry-leading user experience, combined with FOX, will provide greater impact and scale for consumers.

New York-based Fox Corporation is actually a newly created media company controlled by the Murdoch family. It was formed out of the Disney acquisition of 21st Century Fox and it began trading on Nasdaq earlier this year. It includes Fox’s television properties such as Fox News, Fox Business Network and Fox Sports.

Here is what Fox CEO Lachlan Murdoch said about the acquisition: [Read more…]

Credible Expands Their Marketplace Into Mortgage Refinancing

The online loan marketplace is adding mortgage refinancing to its suite of products that already include student loans and personal loans

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Credible made a name for themselves in student loans. They are the first and largest marketplace for people looking to refinance their student loans. Borrowers could enter their information at Credible and be confident that they are getting the best interest rate for which they are qualified. With deep connections into many leading lenders they can provide this high level of confidence and therefore a better user experience.

They are now bringing this expertise to another vertical: mortgage refinancing. I caught up with CEO and founder Stephen Dash last week to talk about this latest move. He said the key differentiator at Credible is that they are the first company to ever give you actual rates (not the usual estimates) from multiple lenders in three minutes and they don’t share their customer’s data with any lenders until the customer is ready to pull the trigger. And then they will share this data with just one lender. Because they are integrated with the underwriting models of their lending partners they are highly confident that their customers will be approved once they pass this information along.

This is all about user experience. Stephen said that customers today do not want to be spammed by multiple lenders all vying for their business. They want a partner who will sort through the different options available and recommend the best one. They are also the first marketplace to allow customers to go end to end so borrowers can close their chosen loan without leaving the Credible marketplace.

[Read more…]

Credible Raises US$50 Million in an IPO in Australia

The San Francisco based online marketplace for consumer loans has gone public down under in the biggest tech IPO of the year on the Australian Exchange

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Stephen Dash likes to go down the road less traveled. As an Australian investment banker turned entrepreneur he saw a market opportunity in the USA and he jumped on it despite never having lived or worked in this country. He founded Credible in 2012 as an online marketplace for student loans. You can read a more complete version of this founding story in my podcast with Stephen from about a year ago.

He has built Credible into one of the leading online marketplaces for consumer finance in the USA. Before this IPO, which raised US$50 million, they had raised $23 million in two funding rounds from the likes of some leading Australian and Hong Kong based investors. Ron Suber, the mayor or godfather of fintech, is Chairman of Credible and joined Stephen on their recent investment road show through South-East Asia.

Now, the Credible story is going full circle. Today, on the Australian Securities Exchange (ASX) Credible is going public, raising US$50 million at a US$240M valuation in what will be the largest tech IPO in Australia this year. I caught up with Stephen Dash earlier this week to talk about this exciting development for Credible.

Australia is Looking to Attract Growth-Stage Tech Companies

The first question I asked him was why? Why go public now and why do it in Australia? He said for both questions there were many good reasons. He had decided to do another funding round and started exploring the private markets as the logical option. The reality is that when raising money privately the investment often comes with a lot of restrictions. And once you are a public company you can raise new capital quite quickly sometimes even within a week.

[Read more…]

Credible Adds Ron Suber as Executive Vice Chairman

Ron Suber's newest role is working with Credible, a marketplace he has previously invested in.

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It was only a month ago when we broke the news that Ron Suber was stepping down as Prosper’s President to pursue what he stated as a ‘rewirement’. Today, it was announced that Ron is joining the multi-lender marketplace Credible as Executive Vice-Chairman and member of the board of the directors.

Ron Suber was not only involved in rebuilding Prosper for a number of years but as many people already know he has been an active investor in fintech companies, investing in 21 companies. Credible is a company he has been involved with since 2015, having originally invested in the company’s Series A and Series B rounds and acting in an advisory role.

Stephen Dash is the founder and CEO of Credible and was interviewed on the Lend Academy podcast late last year. Dash built Credible in the United States after seeing successful multi-lender marketplaces in Australia, his home country. What makes them unique is their deep integrations with their lending partners. The company started as a marketplace for student loans, but has since expanded into personal loans.

The press release announcing the addition of Ron Suber to the team also mentioned that Credible was piloting a credit card marketplace. When we spoke to Dash he said that the site, which launched today, is  version 1 of the credit card offering. Credible has always focused on user experience and helping customers get the best product for them so it will be interesting to see how this product develops over time. Credible already has a large customer base so it can be expected that adding personalized offers is on the product roadmap. According to Dash 90% of their existing audience has at least one credit card. Through the first half of 2017, over 80,000 people have been qualified for loan offers through Credible which provides a sense of scale of the business today.

Peter Renton spoke with Ron yesterday about his involvement with Credible. Ron shared that he will be “leaning in” with some of the companies where he has invested. He has participated in both equity rounds at Credible and he really wants to help the company however he can. He will not be an employee at Credible, he will be Executive Vice Chairman and Ron expects this role will involve about one day per week.

Ron still firmly believes in helping with EAU (education, awareness and understanding) of our industry and he continues to help spread the word in this way. He has also organized his new entity Rewire LLC that will support his new initiatives during his “rewirement”.

Stephen Dash told us that Ron will be helpful in a broad range of activities related to the business whether it be fundraising, strategic decisions or helping the team as the company scales. Dash noted that despite the headwinds many online lenders have experienced, Credible’s marketplace continues to grow and Ron will help in navigating the growth they expect going forward.

Conclusion

Given Ron’s role in fintech he sees many companies that come across his desk and the fact that he’s taking a more active role says a lot about his confidence in Credible’s business. Credible’s business model is very different than some of the other aggregator sites and they are certainly one to watch in this space.

All is Not Well in the World of Student Loans

More people are defaulting on their student loans than ever before even as the volumes keep increasing.

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Last week the New York Federal Reserve President, William Dudley, gave a briefing on household debt with a particular focus on student loans. The briefing was based in part on a report just released by the NY Fed titled, Diplomas to Doorsteps: Education, Student Debt, and Homeownership.

The briefing highlighted the fact that household debt levels have almost returned to pre-crisis levels but the typical consumer’s balance sheet looks quite different. The big change is that consumers have moved away from housing related debt and accumulated much more student and auto loan debt.

At the same time, this increased student loan debt is having an impact on home ownership. Here is Fed President Dudley:

Those with significant student debt are much less likely to own a home at any given age than those who completed their education with little or no student debt… Of course, home ownership is more than just consumption — it has historically been an important form of wealth accumulation.

It is clear that burdensome student debt is now holding many people back financially. Student loan debt now stands at a staggering $1.3 trillion (as of the end of 2016) an increase of 170 percent over the preceding 10 years. There are three contributing factors to this increase:

  1. More students are taking out loans.
  2. The loans are for larger amounts.
  3. Borrower repayments have slowed down.

[Read more…]

Credible Expands from Student Loans, Now Offers Personal Loans

We provide an overview of Credible, the personal loans marketplace, that will now offer comparison shopping for a wide range of credit products.

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Credible_Student_Loans

Credible, who describes itself as a multi-lender marketplace will now offer personal loans on their website. They will offer borrowers access to multiple personal loan options allowing borrower to make the best credit decision for themselves. Previously, they only offered private student loans and student loan refinancing. There are several things that make Credible unique compared to their competitors who also offer comparison shopping for loans. We talked to Stephen Dash, Founder and CEO of Credible to learn more about the company and their key differentiators.

Credible Overview

Credible was founded in November of 2012 and officially launched their student refinance product in February of 2014. In May, 2015 they launched their student loan origination product. This product is for students with co-signers or parents for a private loan while in school. Stephen noted that about 15% of total student loan originations are private representing about $10 billion of originations per year.

One of the key differentiators with Credible is that they put the borrower in control. Personalized offers from multiple lenders are given to the borrower before the borrower’s personal information is sent to the lender. Thus, the borrower is not contacted until they opt-in by choosing an offer, which makes for a better customer experience. What’s interesting is for Credible’s student loan product, Credible is actually running the underwriting on their side for pre-qualification which means no information is shared with the lenders until the loan is accepted. Once this happens, the borrower is taken to the lender’s website where the loan application process is already started and there is no need to input information twice. [Read more…]

ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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