Written By Pagaya Technologies, a fintech startup that utilizes artificial intelligence to manage institutional money, is reportedly considering acquiring Sunlight Financial, a leading point-of-sale fintech platform for home improvement loans. The move is aimed at expanding Pagaya’s reach in the consumer credit market.
While the acquisition is yet to be confirmed by either company, sources familiar with the matter have disclosed that discussions are ongoing, and the deal could be worth over $1 billion. If the acquisition goes through, it would represent a significant milestone for both companies.
Sunlight Financial, founded in 2014, has established itself as a leading provider of home improvement loans in the United States, partnering with over 6,000 contractors and distributors. The company has funded over $4 billion in loans to date and recently raised $200 million in a Series D funding round led by Tiger Global Management.
Pagaya, on the other hand, is a fast-growing fintech company that utilizes artificial intelligence to manage institutional money. The company, founded in 2016, has raised over $600 million in funding to date, and its assets under management have grown to over $2.3 billion. Pagaya’s platform offers institutional investors access to consumer credit products that are usually not available through traditional channels.
According to industry experts, the proposed acquisition would enable Pagaya to leverage Sunlight Financial’s network of home improvement contractors and distributors to expand its reach in the consumer credit market. It would also provide Sunlight Financial with the resources it needs to continue its growth trajectory.
The acquisition would come at a time when the demand for home improvement loans is at an all-time high due to the COVID-19 pandemic. With more people staying at home and seeking to improve their living spaces, home improvement projects have become increasingly popular, creating a massive market for loans.
While the potential acquisition of Sunlight Financial would be a significant development for Pagaya, it is not the first time the company has looked to expand its portfolio through acquisitions. In 2020, the company acquired a significant stake in Marlette Funding, a leading fintech platform specializing in personal loans.
The proposed acquisition of Sunlight Financial by Pagaya is still in its early stages, and there is no guarantee that the deal will go through. However, if it does, it could create a formidable force in the consumer credit market and help both companies meet their long-term growth objectives.
