Aven hits $1 billion valuation, gets backing from top investors — but how solid is the concept?
In 2019, in his mid-30s, Sati Khan left Facebook after six years to found Aven. The idea: to replace the high interest rates of credit cards with low-interest home equity lines of credit (HELOCs) by expediting the approval of these lines of credit and consolidating them into the credit card.
Today, five years later, Aven has 33,000 customers and a loan volume of $1.5 billion. Based in Campbell, California, the startup recently raised $142 million in a Series D round to reach a $1 billion valuation. Investors include Khosla Ventures, General Catalyst and Founders Fund.
Although Aven is not yet profitable, Kahn expects the company to turn positive in six months. So far, Khan has not given any press interviews, but in conversations with Forbes he supported his product. Targeted at affluent, responsible borrowers, Aven offers interest rates between 7.99% and 15.49%, making it one of the most affordable providers in the HELOC industry.
The product combines a HELOC with a credit card. Loan limits range from $5,000 to $250,000, and customers pay no appraisal or processing fees. Instead, there is a 2.5% fee on withdrawals and transfers and a 2% cashback reward on purchases.
Aven has reduced the approval process to 15 minutes, compared to traditional banks, which can take up to a month. This card can be used for big expenses like home improvement projects or debt consolidation.
Having started his career at Microsoft and Facebook, Khan co-founded Aven with Murtada Shah and Colin Wickman. He invested a lot of time in legal research and setting up the technical infrastructure of his product.
While Aven isn’t the only provider to speed up the Helloc process, the company stands out with its combination of credit card and Helloc. Other companies like Figure also offer fast HELOCs, but without the credit card feature.
Kahn sees Aven as a disruptive force in the fintech industry, using technology to lower costs and streamline lending. However, there are concerns about risks, particularly around the use of equity capital for day-to-day expenses and potential regulatory challenges. Khan, however, remains optimistic and relies on his strict credit checks to minimize defaults and ensure Aven’s long-term success.
Text: Jeff Coughlin
Photo: Aven
