After two of its competitors announced financing rounds in the past two months, now comes the turn of online consumer lender Earnest Inc.
The San Francisco company pulled in a $75 million Series B round of funding led by Battery Ventures that included participation from Adams Street Partners and earlier backer Maveron. Under the deal, Battery General Partner Roger Lee joined Earnest’s board of directors.
Earnest also secured $200 million in commitments from New York Life and others in a warehouse financing facility that will be used to finance loans.
The startup is chasing the same borrowers as do other well-capitalized private competitors, including Common Bond Inc., which raised a $35 million venture round in September, and Social Finance Inc., which pulled in a massive $1 billion from SoftBank Group Corp.
As coffers of online lenders get larger, so does the and the cost of acquiring borrowers, as VentureWire previously reported. Loan offers from Earnest, for example, appear side by side with those from CommonBond and others on loan comparison site CreditKarma.com. Some in the industry have called into question the sustainability of this land grab.
“I prefer not to discuss customer acquisition costs specifically,” said Louis Beryl, chief executive and co-founder of Earnest, declining to say how these expenses changed over the past year.
To read the full article on Earnest’s plans, check out VentureWire.