When David Zalik founded GreenSky Credit back in 2006, he had a radically different vision than that shared by his competitors in the fintech industry. While the people behind the scenes at other fintech giants like Lending Club and OnDeck were busy giving high-tech pitches to investors in black turtlenecks, taking about the imminent arrival of financial utopia where NINJA loans would become prime and every street person was just a loan away from becoming a captain of industry, David Zalik was working to build his high-tech company the old-fashioned way.
Zalik’s idea was that the best way to add value in the lending industry wasn’t to smash the entire sector to bits and reinvent the wheel. Instead, Zalik concentrated on doing what worked, just doing far more of it by creating technology that would allow vastly more deals to get done. The area that Zalik focused in on with the creation of GreenSky Credit was big-ticket point-of-sale purchases. In particular, GreenSky Credit’s first foray into the lending business focused on creating a way to instantly match prime borrowers with some of the nation’s largest lenders to complete home remodeling projects for which customers had a cash shortfall. This would prove to be a highly lucrative strategy.
While Zalik was creating a business that focused on strong fundamentals and the proven lending practices that have been developed over centuries, companies like OnDeck and Lending Club were attempting to rewrite the laws of economics. The latter two companies focused on things like microlending and peer-to-peer loans, hoping to usher in an era of financial utopia where people who banks refused to deal with due to terrible credit would be able to have access to large credit facilities. The unsurprising end to this story has now mostly played out. Both Lending Club and OnDeck are hanging onto life by the barest threads. Both companies may soon face bankruptcy and liquidation.
GreenSky Credit, on the other hand, is now worth an estimated $4 billion. And David’s Zalik vision of creating value by doing more of what is proven to work, while not romantic and exciting, has paid off handsomely.