Context – The Need for Responsible Small Dollar Credit
If you are one of the 45 million people in the US who has little-or-no credit history, your options are limited if you need to borrow money to fix your car, pay the security deposit on a new rental apartment, or get through a medical emergency.
People with scant credit history are considered “unscorable” by the three major credit bureaus. That means some of the options many of us rely on for unexpected expenses – like credit cards – simply aren’t an option for them. Unfortunately, most mainstream financial institutions haven’t figured out how to evaluate the risk profile or likelihood of repayment of someone who lacks a credit score – or how to make serving such a population profitable enough to warrant the effort.
Sometimes the only option available to individuals with limited credit history is to turn to payday, auto-title, or pawn loans. Some of these alternatives may have high rates or unrealistic payment terms. Because many of these alternatives do not report customer accounts to credit bureaus, these loans do not necessarily help individuals establish the credit history and score they need.
Oportun is a financial technology company founded in 2005 with the mission of providing affordable loans that help people with little or no credit history establish credit and build a better future.
Oportun uses advanced data analytics and technology to score the “unscorable” and offer responsible, affordable, credit-building loans to individuals with limited credit history. Oportun operates more than 245 retail locations and delivers bilingual (English/Spanish) customer service via retail locations, contact centers, and mobile to customers in Arizona, California, Florida, Illinois, Missouri, Nevada, New Mexico, Texas, and Utah.
In recognition of Oportun’s goals of increasing economic opportunity for its clients, promoting community development, and serving low-income or underserved communities, Oportun is certified by the United States Department of Treasury as a Community Development Financial Institution or CDFI.
Oportun is headquartered in Redwood City, CA.
Oportun’s approach to lending
Oportun loans range from $300 “starter” loans to $8,000* for returning customers.
- Oportun loans are responsible: Our proprietary system – which leverages advanced data analytics and ten years of insights gained from serving customers – determines every loan applicant’s ability to repay and approves loans to those it calculates are likely to repay on time. Our underwriting also includes verifying income for all loan applicants.
- Payment terms are realistic: We use our data analytics to determine loan amounts and terms that fit individual budgets. Our loans feature fixed, affordable payments over 7 to 35 months. There are no “surprise” balloon payments. There is no penalty for pre-payment. Payments align to customer pay periods.
- Our loans are affordable: Compared to the alternatives typically available to people with limited credit history — including payday, auto-title, and pawn loans — Oportun loans are affordable. Those alternatives are on average more than three times more expensive than Oportun loans but can be up to seven times more expensive, according to a study conducted in California, Texas, and Illinois on Oportun’s behalf by the Center for Financial Services Innovation (CFSI), a leading authority on consumer financial health.**
- We help customers establish credit history: Customer accounts are reported to credit bureaus to help borrowers establish credit history.
We are proud of the impact we’ve had since our first loan in 2006.
Our 2 million loans (and counting), prove that small dollar credit can be provided in a more responsible, ethical, and scalable way.
We’ve helped more than one million customers, the vast majority of whom live in low-to-moderate income communities, by disbursing more than $4 billion in loans (as of August 15, 2017).
Our customers have saved an estimated one billion in interest and fees by borrowing money from us instead of choosing other alternatives typically available to people with limited credit history in Arizona, California, Illinois, Nevada, Texas, and Utah (as of June 30, 2017). (This is according to the previously mentioned research study commissioned by Oportun and conducted by CFSI.)
Oportun highlighted as a responsible and affordable alternative:
- Oportun featured in its top tier list of responsible alternatives. Stopping the Payday Loan Trap: Alternatives that Work, Ones that Don’t (2010) by the National Consumer Law Center, a national non-profit advocate for consumer justice and economic security for low-income and disadvantaged communities.
- Oportun mentioned as “..an example of a mission-driven lender committed to affordably and responsibly reaching underserved communities,” Encouraging Responsible Credit for Financially Vulnerable Consumers (2014), by the Center for American Progress, a progressive public policy research and advocacy organization.
- Quote: “Affordable alternatives also exist in the non-bank market – including the regulated consumer finance model employed in Texas by Oportun/Progreso Financiero.” Reshaping the Future of Small-Dollar Lending in Texas: Alternatives to High-Cost Payday and Auto Title Loans(2012), by the Texas Appleseed Institute, a nonprofit, nonpartisan organization promoting justice for underserved Texans.
We asked our customers to share what the funds have enabled them to do in their lives. The response was overwhelming – following are a few of the more than 4,000 entries we received from our customers. (Please note that we did not independently verify their testimonials or their use of loan proceeds.)
“[Oportun] has been a huge support for me and my family. The first loan I obtained was for $500, which was a great help and allowed me to pay for the immigration interview for my parents. It had been over ten years since I’d seen them, and it was very difficult to get the money together for the necessary immigration transactions and all of the costs. The second loan I got was for $1,500, this was like a gift from God because with this sum I was able to bring my folks to the United States after their visa application was approved. I hadn’t seen them for over ten years and thanks to this money it became possible to bring them to me. Thanks…”
– N.A., Bakersfield, CA
“I used this loan to process the adoption of a little girl who had been taken from her parents for their neglect. She has been living with us for 2 ½ [years] and this August the process will be finalized. We are very proud to be parents and to be able to provide love and care to a little child who is not responsible for the errors of the parents who abandoned her.”
-N.V., Los Angeles, CA
“[Oportun] has changed the life of my two children, my wife and myself, a humble servant.First Loan–$500: I bought a set of 4 chairs.
Second Loan–$500: I bought a cot for my kids.
Third Loan–$500: I bought a bed; after four years, my wife and I were able to sleep in a bed.
-J. J.B., Santa Ana, CA
With the earlier loan I was able to pay the costs for the burial of my father. I didn’t have good credit at that time, but they believed in me. Today I have a better credit rating, I am becoming better disciplined and more responsible, and will clear up my credit. Yesterday, July 21, 2014, they made me a second loan, which I will use to fix my car. Thank you for existing, [Oportun].
-F.R., Cicero, IL
*Loan approval and terms may vary per applicant. $8,000 loans are for returning customers upon approved credit.
**Oportun: The True Cost of a Loan – CFSI developed a product cost model that took into account the size of a loan, the monthly cash-flow borrowers have available to service a loan, and the rates and terms offered at Oportun and at alternative small-dollar credit providers that are generally used to fulfill similar borrowing needs in the geographic areas served by Oportun (Arizona, California, Illinois, Nevada, Texas, and Utah). Data was collected in December 2016.
One of Oportun’s key strengths is the diversity of its management team, which represents the brightest from the financial services, retail, technology and community development sectors.
Raul Vazquez, Chief Executive Officer
Raul Vazquez is the CEO of Oportun, a Silicon Valley based financial technology company that leverages advanced data analytics and technology to provide affordable loans to individuals with little or no credit history so they can establish credit and build a better future.
Mr. Vazquez came to Oportun after almost nine years at Walmart in various senior leadership roles, including EVP and President of Walmart West, CEO of Walmart.com, and EVP of Global eCommerce for developed markets. Mr. Vazquez previously worked in start-up companies in e-commerce, at a global strategy consulting firm focused on Fortune 100 companies, and as an industrial engineer for Baxter Healthcare.
Mr. Vazquez serves on the Board of Directors of Intuit Inc. He is also a member of the Federal Reserve Board’s Community Advisory Council where he currently serves as its Chairman, and is a member of the Consumer Financial Protection Bureau’s Community Advisory Board.
Mr. Vazquez is a graduate of Stanford University with BS and MS degrees in industrial engineering, and earned an MBA at the University of Pennsylvania.
Mr. Vazquez was named by the Silicon Valley Leadership Group as one of its 2015 “Game Changers,” recognizing 20 “private and public sector leaders, poised and positioned to change the game of the innovation economy and to change the game at the local, regional, state, federal and international levels of engagement.”
Jonathan Coblentz, CFO and Chief Administrative Officer
Financial Officer since July 2009. Prior to joining Oportun,
Jonathan served as Chief Financial Officer and Treasurer
of MRU Holdings, Inc., a publicly-traded student loan finance
company, from April 2007 to February 2009. Prior to joining
MRU Holdings, Jonathan was a Vice President at Fortress
Investment Group, LLC, a global investment management company.
Prior to his time at Fortress, Jonathan spent over seven
years at Goldman, Sachs & Co. Prior to Goldman Sachs, Jonathan began his career at Credit Suisse First Boston, an
investment bank, where he worked for nearly five years. Jonathan received a B.S., summa cum laude, in Applied Mathematics
with a concentration in Economics from Yale University.
Scott Harvey, Chief Legal Officer and Corporate Secretary
Legal Officer and Corporate Secretary since August 2012. Prior
to joining Oportun, he was Co-Founder of Hercules Technology
Growth Capital, Inc., a business development and investment
company, and served as its Secretary and Chief Legal Officer
from December 2003, and also as its Chief Compliance Officer
from February 2005, to August 2012. Prior to co-founding Hercules
Technology, Scott worked in a diversified private law practice
and held several leadership positions at Comdisco, Inc., a leading
technology and financial services company, from 1983 to July
2002, including as its Deputy General Counsel, Vice President
of Marketing, Administration and Alliances and Corporate Counsel.
Scott received a B.S. in Agricultural Economics from the
University of Missouri, a J.D. and L.L.M. in taxation from The
John Marshall Law School and an M.B.A. from the Illinois Institute
Patrick Kirscht, Chief Credit Officer
President, Risk Management and Chief Risk Officer since January
2008. Prior to joining Oportun, Patrick was Senior Vice
President of Risk Management for HSBC Card Services, Inc., the
consumer credit card segment of the larger HSBC Holdings, from
2007 to 2008. Patrick joined HSBC Card Services in 2005
as part of HSBC’s acquisition of Metris Companies Inc., a start-up
mono-line credit card company. Patrick joined Metris Companies,
a direct marketing company, in 1995, where he served as Vice
President of Planning and Analysis until he moved to Risk Management
in 2004. Patrick received a B.S. in Economics with a minor
in Statistics, a B.S. in Business and an M.B.A. from the University
David Needham, Chief Technology Officer
Joan Aristei, Chief Compliance Officer, Compliance & Enterprise Risk
Matthew Jenkins, Chief Operations Officer
Ezra Garrett, Vice President, Government & Community
Vice President, Government & Community Relations since August
2015. Prior to joining Oportun, Ezra served as Vice President
of Community Relations and Chief Sustainability Officer at Pacific
Gas and Electric Company, or PG&E. Ezra experience
includes leadership roles in Government Relations and Corporate
Affairs at PG&E, where he worked for a total of 13 years,
from 2000 to 2005 and again from 2007 to August 2015, including
serving as the Executive Director of the PG&E Corporation
Foundation from December 2010 to August 2015. From 2005 to 2007,
Ezra was a Senior Community Relations Specialist at Target
Corporation. Ezra has served on the boards of directors
of Leadership San Francisco since 2010, the Latino Community
Foundation since 2013, and the Association of Corporate Contributions
Professionals since 2014. Ezra received a B.A. in Political
Science from the University of California, Berkeley with an
emphasis in International Relations.
Nicholas LeCuyer, SVP, Retail, Marketing and Product Management
President, Product Management since June 2014. Prior to joining
Oportun, Nicholas served as Vice President, Strategy and
Partnerships for The Western Union Company, a financial services
company, from January 2011 to June 2014, and as its Vice President,
Head of Corporate Strategy from August 2008 to January 2011.
Nicholas previously also served as an Associate Principal
at McKinsey & Company, Inc., a management consulting company,
and as a Captain in the U.S. Army. Nicholas received a B.S.E.
in Civil Engineering from Princeton University and an M.B.A.
from the University of Michigan Stephen M. Ross School of Business.
Sonia Clark, Chief People and Diversity Officer
Board of Directors
The Honorable Aida M. Alvarez has served as a member of Oportun’s board of directors since August 2011. In addition to serving on our board of directors, Ms. Alvarez has served as member of the board of directors of Wal-Mart Stores, Inc. since 2006 and Zoosk, Inc., an online social media company, since February 2014. Ms. Alvarez is the former Administrator of the U.S. Small Business Administration and was a member of President Clinton’s Cabinet from 1997 to 2001. From 1993 to 1997, Ms. Alvarez was the founding director of the Office of Federal Housing Enterprise Oversight. Prior to 1993, she was a vice president in public finance at First Boston Corporation, an investment bank, and Bear Stearns & Co., Inc., an investment bank. She also previously served on the board of directors of PacifiCare Health Systems, Union Bank, N.A. and UnionBanCal Corporation. Ms. Alvarez received a B.A. in English literature from Harvard College, as well as honorary doctorates from Bethany College, Iona College, Mercy College and the Inter-American University of Puerto Rico. Ms. Alvarez was elected to serve on the Harvard Board of Overseers. We believe Ms. Alvarez’s extensive experience in government and public service, investment banking and finance, and her knowledge of our company enables her to make valuable contributions to our board of directors.
Carl Pascarella has served as a member of Oportun’s board of directors since March 2010. Mr. Pascarella is an Executive Advisor at TPG Capital, a leading global private equity firm, and has served in that capacity since August 2005. Mr. Pascarella joined TPG after retiring in 2005 from Visa U.S.A., Inc., a financial services company, where he served as the President and Chief Executive Officer for 12 years. Mr. Pascarella also served as President and CEO of Visa International’s Asia-Pacific Region and Director of the Asia-Pacific Regional Board. Prior to joining Visa International, Mr. Pascarella held positions as Vice President of the International Division of Crocker National Bank and Vice President, Metropolitan Banking, at Bankers Trust Company. Mr. Pascarella received a M.S. in Management from the Stanford Sloan Program at the Graduate School of Business at Stanford University. We believe Mr. Pascarella’s leadership background as well as his extensive management experience in our industry enable him to make valuable contributions to our company and our board of directors.
David Strohm has served as a member of our board of directors since February 2007. Mr. Strohm has been affiliated with Greylock Partners, a venture capital firm, since 1980, where he has served as a Partner since January 2001, and previously served as a General Partner from 1983 to 2001. Mr. Strohm currently serves as a director of several private companies. Mr. Strohm was previously also a director of DoubleClick, Inc. from 1997 to 2005, Internet Security Systems, Inc. from 1996 to 2006, SuccessFactors, Inc. from 2001 to 2010, EMC Corporation from 2003 to October 2015 and VMware, Inc. from 2007 to October 2015. Mr. Strohm received a B.A. from Dartmouth College and an M.B.A. from Harvard Business School. We believe that Mr. Strohm’s extensive experience as an investment professional in our industry and as a director of various companies, many of which are publicly traded, enables him to make valuable contributions to our company and our board of directors.
Jules Maltz has served as a member of Oportun’s board of directors since August 2013. Mr. Maltz is a General Partner at Institutional Venture Partners, or IVP, where he has worked since August 2008. At IVP, Mr. Maltz focuses on later-stage venture investments in rapidly growing internet and software companies. Mr. Maltz currently serves on the board of directors of Indiegogo, NerdWallet, RetailMeNot, TuneIn, and Yext. Mr. Maltz received a B.A., magna cum laude, in Economics from
Yale University and an M.B.A. from Stanford University. We believe Mr. Maltz’s experience as an investor and board member in rapidly growing internet and software companies enables him to make valuable contributions to our board of directors.
Louis P. Miramontes has served as a member of Oportun’s board of directors since October 2014. Mr. Miramontes is a CPA and financial executive. He was a senior partner at KPMG LLP, a public accounting firm, from 1986 to September 2014, where he served in leadership functions, including Managing Partner of the KPMG San Francisco office and Senior Partner KPMG’s Latin American Region. Mr. Miramontes was also an audit partner directly involved with providing audit services to public and private companies, which included working with client boards of directors and audit committees regarding financial reporting, auditing matters, SEC compliance and Sarbanes-Oxley regulations. Mr. Miramontes received a B.S. in Business Administration from California State University, East Bay, and he is a Certified Public Accountant in the State of California. We believe Mr. Miramontes is qualified to serve on our board of directors due to his professional experience and deep audit and financial reporting expertise.
Jo Ann Barefoot joined the Oportun Board of Directors in October 2016. Ms. Barefoot is a Senior Fellow at the John F. Kennedy School of Government’s Mossovar-Rahmani Center for Business & Government at Harvard University, and the CEO of Barefoot Innovation Group. In this role, she regularly writes, speaks, and advises on the intersection of financial technology and regulation to facilitate new solutions for consumers. Ms. Barefoot also serves as a consultant to a number of consumer finance companies, and invests and advises fintech startups. She served for three years on the Consumer Advisory Board of the Consumer Financial Protection Bureau (CFPB), and currently sits on the boards of the Center for Financial Services Innovation (CFSI) and the National Foundation for Credit Counseling (NFCC). She also hosts the podcast show Barefoot Innovation and is co-founder of the RegTech firm, Hummingbird Fintech. Earlier, Ms. Barefoot was the first female Deputy Comptroller of the Currency and led the creation of that agency’s original consumer protection unit. She has also served on the staff of the U.S. Senate Committee on Banking, Housing and Urban Affairs; as Co-Chair of the consulting firm Treliant Risk Advisors, as a Partner and Managing Director at KPMG Consulting; and as Director of Mortgage Finance for the National Association of Realtors.
Raul Vazquez has served as Chief Executive Officer and as a member of Oportun’s board of directors since April 2012. Prior to joining Oportun, Mr. Vazquez served as an Executive Vice President of Global e-Commerce at Wal-Mart Stores Inc., a retail company, from February 2011 to August 2011. Mr. Vazquez also served as Executive Vice President and President of Wal-Mart West at Wal-Mart Stores Inc. from February 2010 to February 2011. He served as Chief Executive Officer of Walmart.com from February 2007 to February 2010. He joined Walmart.com in 2002. Mr. Vazquez has served as member of the board of directors of Staples, Inc. since 2013. Mr. Vazquez received a B.S. and M.S. in Industrial Engineering from Stanford University and an M.B.A. from the Wharton Business School at the University of Pennsylvania.
The Catalyst Fund of CFSI
The Center for Financial Services Innovation develops and distributes real-world tested research and strategy, provides funding to promising companies, and facilitates cross-sector business collaboration. They work with banks, credit unions, technology vendors, alternative service providers, consumer advocates and policy makers to forge the pioneering relationships, products and strategies that will transform industry practice and the lives of underbanked consumers across the economic, geographic and cultural spectrum.
Charles River Ventures
Founded in 1970, Charles River Ventures is one of the nation’s oldest and most successful early-stage venture capital firms with approximately $2.1 billion under management. CRV is dedicated to helping exceptional entrepreneurs turn their ideas into the next category leaders in high growth technology and media sectors. Over the past 10 years, CRV funds have been ranked among the industry’s top performers. CRV has offices in Boston, MA and Menlo Park, CA. For more information visit http://www.crv.com/.
Core Innovation Capital
Core Innovation Capital is the only venture capital fund that invests exclusively in financial technology companies serving America’s emerging middle class. Its target segment consists of more than 70 million consumers, who generate over $1 trillion in annual income and spend more than $78 billion in fees and interest on financial services per year. The fund partners with proven entrepreneurs who seek above-market-rate returns and share its vision to improve the lives of low- to moderate-income Americans. For more information about Core Innovation Capital, visit www.corevc.com.
DAG Ventures leads mid-stage and growth financing rounds into promising portfolio companies of select, proven early-stage VC partnerships. Aside from our highly focused investment model, we believe in differentiation through service. Our firm is built to deliver consistent, expeditious and superior service to our most important constituencies: our LPs, portfolio companies and select early-stage VC partnerships. DAG Ventures was spun-off in 2004 from Duff Ackerman & Goodrich, a private equity investment firm focused on investments in the communications and media industries. Today, with support from a diverse, global set of LPs, DAG Ventures manages $1.8 billion across a portfolio of over 160 companies in a wide array of technology sectors.
Glynn Capital Management
Glynn Capital Management is a technology investment firm focused on investing in leading public and private technology growth companies.
Founded in 1965, Greylock Partners is one of the world’s leading venture capital firms. Over the past 43 years, Greylock has funded and helped build several hundred successful companies. The Greylock approach uniquely puts the entrepreneur first, with Greylock working as an “invited guest” in a highly supportive yet consultative way to help entrepreneurs build market-leading companies. Companies Greylock has funded include Ascend Communications, CheckFree, Continental Cable, Data Domain, Decru, DoubleClick, Internet Security Systems, Ikanos, Legato, Millennium Pharmaceuticals, Openwave, Red Hat, RightNow Technologies, Tellabs, Trilogy and Wily Technology. Greylock’s offices are located in Silicon Valley, the Boston area and Israel. For more information, please visit www.greylock.com.
Institutional Venture Partners
With $4 billion of committed capital, Institutional Venture Partners (IVP) is one of the premier later-stage venture capital and growth equity firms in the United States. Founded in 1980, IVP has invested in over 300 companies, 98 of which have gone public. IVP is one of the top-performing firms in the industry and has a 33-year IRR of 43.2%. IVP specializes in venture growth investments, industry rollups, founder liquidity transactions, and select public market investments. Since its inception, IVP investments include such notable companies as AppDynamics, ArcSight (HPQ), Buddy Media (CRM), ComScore (SCOR), Concur Technologies (CNQR), Dropbox, Fleetmatics (FLTX), HomeAway (AWAY), Juniper Networks (JNPR), Kayak (PCLN), LegalZoom, LifeLock (LOCK), Marketo (MKTO), MySQL (ORCL), Netflix (NFLX), ngmoco (DeNA), Polycom (PLCM), Pure Storage, RetailMeNot (SALE), Seagate (STX), Shazam, Snapchat, Supercell, Synchronoss (SNCR), Tivo (TIVO), Twitter (TWTR), and Zynga (ZNGA). For more information, visit http://ivp.com or follow IVP on Twitter: @ivp.
Madrone Capital Partners
What it means to be a CDFI
Oportun, formerly Progreso, was certified by the U.S. Treasury Department in 2009 as a Community Development Financial Institution (CDFI).
- Community Development Financial Institutions – or CDFIs – are mission-driven financial institutions that are dedicated to providing financial services to meet the needs of economically disadvantaged individuals within underserved communities.
- CDFIs invest in local communities and the residents who live there by providing critically needed financing often unavailable from mainstream financial institutions.
- CDFIs are certified by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund – known as the CDFI Fund. In order to become a certified CDFI, the financial institution must: have a primary mission of promoting community development; provide financial products and services; serve one or more defined low-income target markets; maintain accountability to the community it serves; and be a legal non-governmental entity.
- All CDFIs share a common mission of serving low-income communities. CDFIs are commonly loan funds, credit unions, community banks, or venture capital funds.
- Certified CDFIs are part of a national network promoting economic growth in America’s underserved communities by financing businesses, creating jobs, and rebuilding neighborhoods.
- As a CDFI, Oportun puts the community first and values local economic growth.