Fintech Startup Earnest Sells to Navient for $155 Million
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Fintech Startup Earnest Sells to Navient for $155 Million

Fintech Startup Earnest Sells to Navient for 155 Million

Earnest, a Fintech startup, is a technology-enabled lender that provides personal loans and student refinancing. It is being sold to Navient for $155 million. Navient is based out of Delaware and is one of the largest companies whose operations include servicing student loans.

Headquartered in San Francisco, Earnest was founded in 2013. The company uses unconventional methods in analyzing a borrower’s eligibility for loans. It doesn’t just rely on the credit score, but it uses software and algorithms to evaluate a person’s full education, employment and financial profile in order to obtain a complete financial profile of each applicant.

Until now the company has raised $321 million in debt and equity from investors, such as Andreessen Horowitz, Atlas Venture and Collaborative Fund. However, being a refinancing establishment, the company had struggled to raise capital that would help it finance loans. With this acquisition the company will be able to gain the financial leverage it has been lacking.

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 Louis Beryl, one of Earnest’s co-founders, in a company blog post. He noted that he began talking to Navient a year ago.

Congress founded Navient, formerly part of Sallie Mae, with the intent to support the student loan program established by the Higher Education Act of 1965. However, in 2014 the company split from Sallie Mae. Its main focus is servicing student loans. This acquisition will enable Navient to enter the business of loan origination.

“Together, we will create and deliver consumer-centric education credit products for the digital age,” said Navient CEO Jack Remondi, who referenced Earnest’s “best-in-class” data science and technology.

Despite the merger Earnest will continue to remain a distinct brand and will be led by its current management team, which includes Co-founders Louis Beryl and Ben Hutchinson. The merger is supposed to take place in the fourth quarter this year.

Tanuja Thombre
Tanuja Thombre
A Soft Skills and Behavior Trainer by passion and profession, with 8 years of experience into Mortgage Banking sector. Currently I am working as a Training Consultant and I cater to the training needs across various industries. This also allows me to interact with, train and learn various aspects of human modes. Adorned with certifications from various institutes like Dale Carnegie & Steven Covey. I have a natural instinct for writing; every once a while, a Blog, a short article and in the future I plan to author a Book. When it comes to writing, I believe there is seldom anything as appealing as Simplicity.

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