OnDeck (previously On Deck Capital) is a technology-enabled financial platform that provides loan financing to small and medium-sized businesses in the United States. Founded in 2006 and headquartered in New York City, the company uses proprietary software to aggregate data about a business’ operations, which is processed by an algorithm that determines loan eligibility. As of 2014, OnDeck had funded more than $1.7 billion in loans.
Jacobs came up with the concept for OnDeck—and built its loan evaluation software—after he noticed that financial institutions were unwilling to spend the time and money on performing due diligence for small businesses seeking loans smaller than $100,000.
He hired the company’s first employee, Noah Breslow, at the firm's founding in 2006. Born in Brookline, Massachusetts, In January 2007, OnDeck received $15 million in funding from Sapphire Ventures, a corporate information technology investor. Through the investment, Sapphire Ventures Managing Director David Hartwig was appointed to OnDeck’s board of directors. In December 2012 Breslow was in acquisition talks with Wonga.com, a London-based payday loan startup, but negotiations ultimately fell through in January 2013 because "the deal would have valued OnDeck at less than $250 million", which Breslow and his investors saw as too low.
In February 2013 Institutional Venture Partners led a funding round with RRE Ventures and First Round Capital that raised $42 million in Series D financing, and by May 2013 the company reported that loan volume was up 100 percent over the previous year and that it had funded more than $450 million in loans and had raised approximately $100 million in credit facility funding.
In May 2013 Google Ventures, along with Peter Thiel and Industry Ventures, invested $17 million in OnDeck in an expansion to the Series D round, bringing the company’s total Series D funding round to $59 million. In September 2013 OnDeck announced $130 million in increased credit facility commitments with assistance from Deutsche Bank, Key Bank and Square 1 Bank.
In March 2014 OnDeck raised a $77 million growth investment round that was led by Tiger Global Management, which would help "accelerate new product development, geographic expansion, marketing and hiring".
Initial public offering
On November 10, 2014, OnDeck filed a prospectus for an initial public offering (IPO) that valued the organization at around $1.5 billion. When the stock opened, it was priced at $26.50 per share, which was 32% higher than its pricing.
OnDeck provides short-term loans ranging from $5,000 to $250,000 to small and medium-sized enterprises. The company charges a percentage based on loan amount and terms; Bloomberg Businessweek reported that according to "a document it sent to investors in the spring ", OnDeck’s interest rates averaged 54%.
OnDeck makes loans to a range of industries, including restaurants, retailers and other service providers.Its average loan size is $45,000.
Criteria for loan approval include having a business checking account, being in business for at least one year, and processing at least $3,000 in credit card transactions every month.
OnDeck Score
The OnDeck Score® is OnDeck's "proprietary assessment of creditworthiness that pulls in more and better data than banks do".
The company’s CEO commented that the scoring system is “the Main Street equivalent of the FICO”.
* Neil Wolfson - President, SF Capital
* Ron Verni - former CEO, Sage Software
In response to the Bloomberg Businessweek analysis, OnDeck's CEO Noah Breslow said, "We audit the brokers through the customer feedback… We terminate brokers all the time. I think cleaning up this industry will be a good thing."
* Crain's New York Business listed OnDeck as one of the best places to work in New York City in 2014
* SellingPower listed OnDeck as one of the 50 Best Companies to Sell for in 2014
* OnDeck was named #94 in the Forbes Most Promising Companies in America
* OnDeck was named #10 on the ' Fast 50 for 2013
* OnDeck was named by SellingPower as one of the 50 Best Companies to Sell for in 2013
* OnDeck was named #11 in the Forbes Most Promising Companies in America for 2014.
* OnDeck listed on Inc. 500 for three consecutive years.
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