Fintech Startup Aven Hits $2.2B Valuation With $110M Raise

Aven, a startup aimed at homeowners who want to tap their equity without the hassle of a traditional loan, has secured some fresh funds of its own.

The San Francisco-based fintech raised $110 million in a Series E round that values the company at $2.2 billion, Fast Company reported. The round was led by Khosla Ventures; General Catalyst, GIC, Founders Fund and others were also involved.

Its previous Series D financing round raised $142 million at a $1 billion valuation.

Founded in 2019, Aven built its business around a secured credit card that functions like a home-equity line of credit, offering prime borrowers lower rates than traditional plastic. The company says it has issued $3 billion in aggregate credit lines and saved customers more than $215 million in interest.

The company claims its patented digital notary process — which involves a robotic arm — can shrink the HELOC application timeline from 42 days to 15 minutes. That speed and lower cost structure have made the product a popular tool for debt consolidation and home improvement projects.

Chief executive officer Sadi Khan said the latest funding round will let Aven “hit the gas pedal hard” on growth and product expansion.

The fund raise comes as U.S. homeowners sit on an estimated $35 trillion in housing wealth. HELOC balances stand at about $400 billion, up 27 percent from pandemic lows, according to Fed data.

Delinquency rates remain muted: less than 1 percent of HELOC balances were over 90 days late in the first quarter, compared to more than 10 percent for credit cards.

Competitors are circling around similar ideas. Figure, Alliant and Rate have all been ramping up their HELOC marketing and direct mail has become a key acquisition channel for players in the space, including Aven.

But Khan says the company’s next act will move it further into the mortgage market. Aven is testing a cash-out refinance product it says could close in as little as 10 days. The startup plans to launch broadly in the next six months.

— Holden Walter-Warner