Chicago based online lender Avant has raised $325m of private financing, led by General Atlantic Partners. Valuation on the deal is $2bn, nearly double the valuation it received in a fundraising round a year ago. Despite concerns about competition and regulation, Avant plans to expand its presence and will launch auto loans and credit cards in the U.S., and is actively looking to expand to Australia. The company currenlty has about 750 employees, most of whom work to service the loan.
Unlike other online lenders with billion-dollar valuations, Avant seeks borrowers with lower credit scores, including subprime borrowers The company says its average borrower has a FICO score of 650, while LendingClub doesn’t make loans to people with scores below 660. FICO scores range from 300 to 850. Subprime borrowers are generally those with credit scores near 650 or below. Avant’s typical borrower has between $40,000 and $100,000 in annual income. The firm’s loans have a higher default rate, about 10%, than Lending Club and Prosper.