Historically, technology companies that have sought to go public have been associated with a wide range of problems. For starters, companies that are still in their growth or maturation phases can be badly damaged by the sudden shift to a quarterly-profit-centric management style. Companies that need to be carefully incubated and coddled may see management doing the corporate equivalent of gulping down seed corn just to appease investors’ short-term thirst for dividends and profits. Stories like these often end in disaster.
And this can be seen in the fintech industry, in particular. Two companies in that industry that come to mind as examples of firms that have perhaps gone public too soon are OnDeck and Lending Club. Both firms are now clinging to life, only staving off seemingly inevitable insolvencies through constant infusions of additional capital. However flawed these businesses may have been at their core, going public too soon only quickened their demise.
But GreenSky Credit is one fintech company that many analysts are saying is ready to take the big plunge into being a public corporation. The company has been around since 2006, and its business model is considered by many, including founder David Zalik, to be fully mature. At the same time, the company, which is currently estimated to be worth somewhere in the range of $5 billion, could benefit enormously from going public. Private companies that are well managed can often double their underlying value by the simple act of going public. And this could raise a great deal of working capital for GreenSky if it happens.
Ultimately, GreenSky Credit has what it takes to go public because it is a business that is so good and so well-designed that it virtually runs itself. Zalik created a company that has been able to grow by nearly 100 percent per year over the last decade, propelling it to the top of the fintech space. At the same time, GreenSky has relationships with some of the most trusted lenders in the nation, including Sun Trust, Fifth-Third Bancorp and Region’s Bank. These advantages point firmly in the direction of a company that could go public tomorrow without any negative consequences.