Who is Aven, the new unicorn that is shaking up fintech ?

© Unsplash.com/Nathana Rebouças

The start-up Aven, based in San Francisco in the United States, recently obtained unicorn status. Targeting wealthy individuals, it offers a credit card backed by the user's home equity, allowing them to borrow significant amounts.

Aven's flagship product: the Home Card

Aven was founded in 2019 by Sadi Khan, Collin Wikman and Murtada Shah, former heads of product, design and engineering at Facebook and Square. With its product, the young company wants to offer an alternative to unsecured credit.

Its card, called Home Card, is already available in 32 American states. It should be deployed in the other 18 before the end of the year. “ We believe that there is no reason for a person with property and a good credit history to use unsecured credit. Unsecured credit is expensive and unhealthy ,” says Sadi Khan, co-founder and CEO of the fintech.

The Home Card is similar to Home Equity Lines of Credit (HELOC), but in the form of a credit card. “With our asset-backed credit cards, we give consumers credit for what they own… which allows them to save thousands of euros without sacrificing convenience,” continues the manager.

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Thus, users can withdraw money via an app, with no daily limit, providing great flexibility for spending. The interest rates applied are also lower than those of traditional credit cards, an attractive feature for borrowers with significant financial resources. They are precisely Aven's target, its typical clients recording revenues in excess of $100,000.

A fundraising campaign to boost its growth< /h2>

According to the CEO, the Home Card is mainly used for significant expenses, such as “ home improvement projects, debt consolidation or children's summer camps ”. This is also preferable, because its use for everyday purchases can encourage imprudent management of finances, putting the value of the house at risk in the event of default.

Customers are required to repay the amount borrowed from their credit card each month. This includes paying a minimum required amount, which is usually calculated as a percentage of the total balance owed. For its part, Aven collects interest on loans granted, as well as interchange fees when consumers use their card.

This July 19, the fintech raised $142 million in Series D, a strategy generally aimed at intensifying the growth of a company. Upstream, it announced the creation of an advisory committee responsible for helping it develop while protecting the interests of its cardholders.

For the moment, a potential deployment abroad does not seem to be up to date. But Aven’s model could resonate in a growing fintech ecosystem. It would nevertheless have to adapt to the specificities and expectations of local consumers.

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