Israeli fintech startup Pagaya is planning to hold its initial public offering, possibly through an SPAC merger. The P2P credit and loans company specializes in managing alternative investments through technology. Reports indicate that Pagaya is looking at an $8 billion valuation from its IPO.
The company raised $102 million in new funding last June which gave it just a $2 billion valuation at the time. So now Pagaya’s owners think that it has quadrupled in value in less than a year, making it possibly Israel’s biggest unicorn. But only a startup can be considered a unicorn so once it goes public, should it actually achieve an $8 billion valuation, the company would not be a unicorn.
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But what caused this boom in value in so short a period of time? Calcalist reported that during the first three months of 2021 Pagaya reported revenues reflecting $300 million annually, and a profit of $100 million for the year. That would be triple the company’s 2019 revenue of just $100 million. And fintech right now is one of the hottest types of tech for any startup to get into, along with cybersecurity and alternative energies.
Founded in 2016 by CEO Gal Krubiner, Yahav Yulzari – a former Israeli soccer star — Avital Pardo and CEO Gal Krubiner, Pagaya Investments is a global financial technology company with new ways to handle institutional asset management. Focusing on fixed income and alternative credit, the company offers a variety of discretionary funds to institutional investors (including pension funds and sovereign wealth funds), insurance companies and banks. It boasts a suite of “unmatched artificial intelligence technologies and state-of-the-art algorithms delivers an exceptional, scalable performance edge in the digital lending space.”
— Pagaya Investments (@PagayaInv) January 14, 2021
Pagaya says that it built the first comprehensive loan-level database utilizing a hybrid of machine learning and financial technologies designed to produce low-risk, high-yield portfolio strategies, resulting in above-market returns. Pagaya has closed six ABS deals in the past year, accumulating over $3 billion AUM to package into collateral for investment securities.
“By reshaping the traditional lending process Pagaya positively impacts each stakeholder in the transaction. We combine an extraordinary team of innovators, researchers, and data scientists with advanced machine-learning and data analytics to create “repeatable success environments” that add value”
Pagaya is backed by leading fintech investors, including Oak HC/FT, Viola Ventures and former Amex Chairman Harvey Golub. The company was founded in 2016 by seasoned finance and technology professionals and has offices in New York and Tel-Aviv.