Loanify Ventures is a private equity fund that acquires lending businesses where our proprietary artificial intelligence-based infrastructure can be applied to accelerate revenue growth and create operational efficiencies.
Not many investors are aware of this, but some of the most historically successful institutional funds that consistently outperform the market allocate up to 75% of their capital to alternative assets, specifically private equity. According to research from The Yale Endowment Fund and KKR, private equity has returned an average of 17.10% per year with a standard deviation of 19.80%, compared to public equities, which have returned 10.53% per year with a standard deviation of 20.33% over the past 80 years.
One of the primary reasons for this is that public investors are passive shareholders, while private equity investors are owners who can improve operations, implement technology, acquire competitors, optimize capital structure, and create value directly. Public markets allow you to invest in businesses. Private equity allows you to improve businesses.
While every private equity firm has its own investment philosophy, most acquisitions fall into one of five categories: purchasing cash flow, purchasing growth, purchasing talent, purchasing synergies, or purchasing with infrastructure. Each approach has historically produced different risk and return characteristics. Our goal is to focus on the strategy that we believe provides the strongest combination of growth potential and value creation.
Let's say Company A trades at a 10X revenue multiple because of unique infrastructure it possesses, while Company B trades at a 3X revenue multiple due to a lack of infrastructure. Hypothetically, once Company A acquires Company B, it can apply that same infrastructure to the acquired business, allowing Company B's valuation multiple to increase. This is a classic roll-up strategy.
The key difference is when that infrastructure not only creates operational efficiencies, but also accelerates revenue growth. Investors benefit not only from an increased valuation multiple on the acquired business, but also from an increased growth rate. This is where you can achieve venture capital-type returns without the venture capital-type risk. The biggest challenge for investors is how rare these opportunities are to access.
A three-stage acceleration model designed for consistent returns.
The founding team behind Loanify has had the unique privilege of working with JP Morgan, Bank of America, and Wells Fargo to design proprietary deep learning algorithms that look at factors outside of just someone's credit score to make lending decisions. This enabled Loanify to extend loans to the distressed debt sector while maintaining default rates of approximately 7%, which is on par with public banks on the NYSE, despite industry default rates often exceeding 30%
If you look at the way lending works, you extend cash up front, and then a borrower pays a portion of it over time to service the loan. This means a company like Loanify needs to wait a certain amount of time to receive its profit. What we realized is that we could raise a private credit fund to purchase our own receivables while using the same set of deep learning algorithms we developed to price them correctly to mitigate risk. So instead of needing to wait years for our profit, we have it now, and in exchange, we give our investors an attractive return
The combination of Loanify's artificial intelligence infrastructure and capital infrastructure created a growth engine. By gaining immediate access to future profits, Loanify was able to reinvest capital into growth initiatives significantly faster than would otherwise have been possible. This enabled the company to scale from 3 sales representatives to more than 100 in less than a year, increasing its valuation from approximately $30 million to roughly $1.2 billion. More importantly, it demonstrated how infrastructure can be used not only to create operational efficiencies, but also to accelerate revenue growth
Loanify Ventures was created to apply the same artificial intelligence, capital, and growth infrastructure that accelerated Loanify's valuation from approximately $30 million to $1.2 billion in less than 1 year to acquired businesses throughout the lending industry that meet a specific criteria.
By identifying companies where this infrastructure can be applied, we believe we can create operational efficiencies, accelerate revenue growth, and increase valuation multiples in a way that traditional private equity firms cannot. We believe this creates a unique opportunity to achieve venture capital-type returns without the venture capital-type risk.
Our institutional onboarding process ensures absolute transparency and compliance.
Initial discovery call with our GP to discuss strategy and alignment.
Deep dive into our historical performance, models, and forward outlook.
One-on-one session to address specific structural and economic questions.
Regulatory compliance check through our secure partner portal.
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