Hungry for Data? Avant Acqui-hires Two Startups to Expand Tech Team

What are the three vectors for the lending industry today? You’d be wrong if you said anything other than data, data, and more data.

And lending companies are on an acquisition spree to collect, analyze and work data to help them find and lend more to new borrowers. Although, acqui-hires or buying a company for a team is not new in the startup circles, it is still a nascent trend among marketplace lending companies that are still carving out territories in the $12 trillion lending marketplace.

Three year old consumer lender Avant acquired two local technology startups, StudyCloud and TempoIQ for data scientists and engineers to build its technology team. StudyCloud is an edtech startup based in Chicago and develops tools for interactive learning. TempoIQ is another Chicago-based startup which provides platforms for Internet-of-Things (IoT) applications and data analytics.

For Avant, this is the second wave of acqui-hires. In March 2015, the company acquired the straggling, online debt management startup ReadyForZero, a tool which let users manage personal debt and credit online. Avant bought ReadyForZero’s technology platform at a time when the company was in a talent crunch, struggling to scale.

“Acqui-hire transactions are a significant win-win for everyone involved. The acqui-hire trend affords members of the startup community to take a chance on their own vision as well as explore new opportunities across various industries,” said Al Goldstein, CEO of Avant in a news release.

As online lenders like Avant bring Silicon Valley and Wall Street closer by using machine learning and big data to develop propriety credit models to identify and lend to new borrowers, acquiring startups to build this technology has become commonplace.

“Acquisitions and acqui-hires are just another sign of how rapidly this industry is evolving. It recognizes the need to bring in highly skilled talent quickly,” said Glenn Goldman, CEO of Credibly. 

Last month, (March 14) Square acquired analytics startup Framed Data, again for its team of data scientists to target customers better for Square Capital. The company mined data using machine learning to predict user behavior and purchasing decisions and will bolster Square’s small business lending.

The changing face of the lending industry is evident with the rise in companies lending to tech savvy millennial borrowers, enriching user experience and tailoring loan products to suit specific needs and really, using data to discover more customers.

“At first glance, it looks like Avant is looking to create a dynamic user experience and targeted at nurturing customers before, during or after borrowing decisions are made, beyond just delivering loan at a given point in time,” said Goldman.