GreenSky has become one of the more surprising success stories in the fintech industry over the last 10 years. Founded in 2006 by prodigious entrepreneur David Zalik, the company has followed a radically different model than many of the company’s fintech competitors. In an industry where posturing as the most disruptive company with the most utopian financial vision has often been what defines the cool kids, Zalik has long been considered something of an outsider.
Yet, the last laugh is now very plainly his. While GreenSky competitors like OnDeck and Lending Club have foundered and sunk under the weight of their own excess and foolishness, GreenSky has continued experiencing massive year-on-year growth since the day the company was created. This is largely attributable to Zalik’s unique vision for how best to go about integrating sophisticated technology into the existing financial sector. Rather than trying to burn the industry down and create something radically new from the ashes, Zalik chose to use technology as a sort of supercharger, helping lenders, borrowers and retailers to do more of what has been proven to work for generations.
Creating big value for everyone involved
This mission to create real value through greasing the already existing wheels of the financial system is best exemplified in GreenSky’s retail home improvement business. Zalik saw that there were many home remodeling deals that were falling through when inexperienced homeowners vastly underestimated the costs of their projects. But these homeowners are largely prime borrowers, with most having FICO scores above 760. At the same time, the expenditures that home renovation projects represent for these homeowners almost always create a nearly immediate return on completion of the projects because they raise the value of the homes more than the renovation costs.
Zalik saw that with GreenSky he could design a platform that would bring these prime borrowers together with major lenders and instantly offer them loans with highly favorable terms. The borrowers win by getting to finish their projects that they otherwise lacked capital to complete. And the lenders and home improvement contractors win by getting business that otherwise would never have materialized.