Few people outside of the financial tech sector have heard the name GreenSky. And even fewer have heard of the company’s camera-shy CEO, David Zalik. But both Zalik and the company he founded have quickly become prominent within the world of financial technology.
Founded in 2006, GreenSky was conceived as a means to bring merchants, customers and banks together in a way that would prevent the needless loss of sales. Zalik had extensive experience working in the home-remodeling sector, a fact brought about by his involvement in e-consultancy firm Outweb. Zalik realized that many sales were being lost at the point of sale as a result of customers experiencing sticker shock. In particular, customers with little or no experience in home remodeling or contracting were consistently underestimating the true costs of projects. This led to many sales being lost, never to be recovered.
Zalik believed that it may be possible to help merchants overcome this sort of point-of-sale customer objection. He started offering loan products that were originally designed for contractor who did in-field house calls. If a customer balked at the bid price, the contractor would be able to tell the customer that they have special promotional financing. Because the average FICO score of this class of customer is in the 760 range, GreenSky could offer spectacular loan terms. A typical GreenSky loan involved no interest or payment for the first year. And because the majority of the borrowers are prime, the lenders themselves don’t have to worry about high rates of delinquencies or defaults.
The model proved to be a boon for home contractors. Zalik quickly realized the potential in other fields. He began branching out into elective medical procedures, sellers of aluminum siding, window replacement and roofers. Today, GreenSky has more than 17,000 merchants who are able to be matched with 14 of the largest lenders in the country, including Fifth Third Bancorp, Sun Trust and Region’s Bank.
GreenSky is currently estimated to be worth more than $4.5 billion, and Zalik is now making strong insinuations that he is considering an IPO.