Online Lender Avant Acquires Debt Management Service ReadyForZero

TECHCRUNCH: Online lending platform Avant has acquired ReadyForZero, a Y Combinator-backed startup that helps consumers better manage their personal debit and credit using online financial software, the companies are announcing this morning. Financial terms are not being disclosed, but Chicago-based Avant had plenty of funds to play around with, having raised$334 million in equity capital, in addition to nearly a billion in debt.

ReadyForZero had raised around $5 million in seed through Series A rounds from Citi Ventures, Polaris Ventures, YC, and others.

Also of note: ReadyForZero’s co-founders Rod Ebrahimi and Ignacio Thayer both participated in Y Combinator as had Avant’s co-founders John Sun and Paul Zhang. However, they were in programs that were around a year apart.

From the sound of things, ReadyForZero was struggling to scale ahead of this acquisition. The startup had signed up just over a quarter of a million users, and 4% were upgrading to premium products, like its automated bill pay service, we’re told. But ReadyForZero had to shut down its paid services earlier this year, lacking the human resources to keep them maintained, admits Ebrahimi.

“We had misjudged how many people it would take to actually service that,” he explains. The co-founder notes that the startup was trying to grow its team, while also exploring what it would do next. The next big vision it had was to get into the lending business, he says. That meant either doing a strategic partnership, or getting into the space itself. Though they were in discussions with others in the space, it turns out that Avant actually reached out to ReadyForZero first.

Avant, by way of background, uses a combination of big data and machine-learning technology to offer consumers quick loan quotes that can be funded as soon as the next business day. To date, it has issued over 150,000 loans it says, at lower-than-traditional rates.