Aven raises $110M Series E for its home equity-backed credit card that closes in 15 minutes

Thanks for having us. This is this is such a complex uh uh industry, but uh it's been really fun tracking all the progress. I don't think we've had any any This is the very first first quantum company on this show. I haven't put I haven't thrown out a lot of invites because I'm so out of the loop on it.

Um but thank you so much for taking us through it and actually explaining it in terms that uh even I can understand. Really appreciate it. Thanks. Have a great rest of your day. We'll talk. Cheers. You're the man. Our next guest is already in the reream waiting room.

We'll bring them in and I will let you give the introduction. [Music] What's going on? Welcome to the show. It's uh uh please please pronounce your name before I butcher it. Sadi Khan. Saudi. Great to meet you. Great to meet you. Uh and welcome to the show. Uh introduce yourself and the company. Yeah, I'm Sadi.

I'm the co-founder and CEO of AAN. AAN is a home equity back credit card company. Uh we launched um our home equity card about four or five years ago and it's been on a tier since then. In 15 minutes or less, you can save 50% or more on your monthly interest rate as a homeowner in America.

We just announced our series E last week and we're excited to do the bump. Thank you. Series E. Yeah. Hard to get into those numbers across four four years.

Um what uh walk walk us through I guess um yeah I'd love to I think it's I think our audience will generally understand how if you have a credit card uh backed by your home equity it'd be easier to be competitor uh competitive from a rate standpoint but um break down the the actual way that you you make this uh work.

Yeah.

So as you know there's about traditionally a home equity credit card t home equity in general takes about 30 days to originate and costs thousands of dollars and as you know a credit card takes a few minutes to get from Capital One or Bank of America any great bank and so we started with this mission of how do we make it as fast as a credit card to get a heliloc and so we got it down to as fast as 15 minutes by machining down this process for maximal efficiency and so whether it be like robot arms that do signatures to automatic income verification the IRS press to everything in between.

We're able to compress this thing down to 15 minutes. So, it feels as convenient as as a credit card, but you get the rates of a heliloc and the rewards and the convenience of a credit card. And so, we offer 2% unlimited cash back on every single transaction that you do on on on a heliloc for the first time ever.

And you get it in the form factor that you can go to Home Depot and spend $1,000 on lumber or you could go to Whole Foods and five spend $5 on a banana. and our customers have been able to do both. That's uh that's pretty incredible.

What um I guess what what were kind of the key unlocks in the journey was there how did you nav like how has like the interest rate environment um kind of impacted the business as well?

I mean uh ultimately there's always going to be a lot of home equity that's just locked up that people aren't able to leverage uh regardless of of the rate environment. But I'm curious what what trends you've seen. Yes.

So I think at a very high level, our goal is to build a product which has the lowest cost of capital for consumers after your primary mortgage. So regardless of the interest rate environment, if it's high or if it's low, that's something we don't control. Jeremy Powell controls that.

So regardless of what the interest rate does, our goal is to come in and offer every single consumer the lowest pos lowest cost of capital after your primary mortgage. And we've generally historically done that. Um, and when interest rates go up, there's generally two or three things that happen.

And when interest rates go down, roughly the inverse of those two or three things happen. So I think we're all expecting interest rates hopefully to come down a little bit for consumers over the next like few months on the next Fed meeting.

And the three things that I think will happen are a we will expect more demand for capital, right? More people will use more credit generally speaking across not just our product, across all products.

um we become actually more competitive in some ways because if you kind of think about it the interest rates dropping drops to a larger proportion the drop affects a heliloc or a mortgage by a larger proportion than a traditional credit card which is also a variable rate product.

And then finally there is some kind of you know trace effects of how interest rates and mortgages kind of interact with one another where due to the very low historical interest rates people are sitting on extremely low mortgage rates but because of the increase in interest rates people are not able to refinance their mortgage and get a cash out which they've done historically and so they're tapping helocks to do home improvement projects make their home better because it's getting harder to move to a new home and it's getting harder to do a cash out refinance.

Yeah. Uh, you said something about robotic arms doing signatures. Anything more to that story? What? Yeah.

So, I mean, I I don't know if you guys when you guys bought your home, um, in San Francisco or elsewhere, when you closed your mortgage deed of trust, you had to go to a notary or you had to go to a title closing station and you had to sign a stack of papers. Yay. Thick. And we looked at that.

And if you wanted to get this thing down to 15 minutes, there was just zero way we can do it by having a notary show up at your house or you going to a title company. So we went, well, how can we figure out a way to be able to do a remote wet signature?

And so we invented this robot arm that literally you control from your phone and you can execute what is something called an original wet signature that is acceptable in every single county across the United States. So we can close this thing down in 15 minutes.

We do some crazy Is that Did Did you guys ever get uh I don't know if many people I'm sure regulators hate this one weird trick. Well, it feels like potentially it feels like potentially a workaround that uh how different is it for me to move a pen than it is to move an arm that that signs a dock, right?

Why do I need to be in the room? You know, why do I love this? We spent probably Yeah, we spent months going through every single I mean, people have tried this before, like trying to build like a a robot arm to do wet signatures.

There's a lot of detail in our patent that goes down to like the exact amount of memory buffer we have to keep on, you know, the device versus the wire versus your phone to ensure it is always an original signature and not just a remote signature.

Well, cuz my my thought was like you could spin this out and it's probably like a billion dollar business by itself. Even though even We've been told that before. You've been told that before. There we go.

We've been told that before, but we're just very focused on making sure homeowners can get access to the lowest cost of capital today. That's amazing. Uh well, congratulations on on the funding uh milestone and uh yeah, I'm sure you guys are just getting started. John, how much was it? $110 million. Congratulations.

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