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FinTech lender Earnest has agreed to be acquired by student loan servicing company Navient for $155 million in cash, after raising $321 million in debt and equity and reaching a valuation as high as $325 million. Earnest joins the ranks of other once high-flying FinTech lenders who have experienced difficulty turning lending into a profitable business model.
The San Francisco-based company has raised $321 million in debt and equity from heavyweight investors such as Andreessen Horowitz, Atlas Venture, Collaborative Fund, according to Pitchbook. However, like other online lenders, it has struggled to raise sufficient capital to fund its loans. The acquisition will allow Earnest to have the backing of a larger company. "By pairing Earnest’s technology, innovation, and data-driven approach with Navient’s reach and resources, we can affect change at incredible scale," said Beryl in a company blog post. He noted that he began talking to Navient a year ago.
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