Enova’s ODX, Fundation To Form SMB Lending Firm Through Merger

Enova International struck a deal to combine its ODX operation with origination solutions company Fundation. Enova will keep a minority share in the new combined company, according to a Thursday (Feb. 25) announcement.

“This transaction creates the largest independent SaaS provider to banks for small business lending,” Enova CEO David Fisher said in the announcement. “We believe that this transaction will fuel growth for Linear while enabling us to more efficiently focus our efforts on growing our core U.S. SMB and consumer businesses.”

Linear Financial Technologies will be the name of the combined firm, which will work in artificial intelligence (AI)-based Software-as-a-Service (SaaS) small business lending offerings, online account origination systems and analysis for small and medium-sized business (SMB) service companies, corporate suppliers and financial institutions.

Enova International, a FinTech firm, offers digital financial services via its AI and machine learning (ML)-fueled lending system. Enova works with small companies and non-prime firms — entities that are underserved in many instances by traditional financial institutions. Enova says it has provided over 7 million clients with more than $40 billion in financing and loans.

The news comes as OnDeck, an Enova International brand, has teamed with HomeAdvisor to help tradespeople and companies on the HomeAdvisor platform access financing. For its part, OnDeck has almost 15 years of experience providing small firms with over $13 billion in digital financing to satisfy the individual needs of each firm.

On Feb. 4, Enova International reported that its overall revenue fell 24 percent between the fourth quarter of 2019 to the fourth quarter of 2020. But the financial services companies reported that overall company originations in Q4 jumped by more than three times from the past quarter to $536 million.

Enova International reported adjusted earnings per share of $2.39 on $264 million in total revenue for Q4 2020. The results exceed analyst estimates of $1.26 per share in earnings on revenue of $250.37 million.