Another San Francisco financial tech company is expanding operations into Utah, looking to add 500 jobs with a capital investment of $5.6 million.
Earnest Inc., a startup that offers low-interest, no-fee loans using its software to analyze applicants’ creditworthiness, will expand its operations into Salt Lake County, the company and the Governor’s Office of Economic Development announced Thursday.
Earnest is the third fintech company from San Francisco to recently announce plans to expand to Utah and join a growing sector of the the state’s tech economy.
Varo Money recently said it was expanding into Utah, and SoFi (Social Finance Inc.) opened an office last year in Cottonwood Heights that has several hundred employees.
“We’re excited to announce that our second location will be in Utah,” Earnest cofounder and CEO Louis Beryl said in a news release. “Utah has become a thriving hub for both technology and financial services companies, with a deep talent pool across multiple areas that is complementary to what we see in San Francisco.”
Bloomberg reported this week that Earnest is seeking to raise $50 million in new equity and also is looking for a buyer. The company has hired Barclays and is hoping for buyer bids of about $200 million, Bloomberg reported, citing people who are familiar with the matter.
The Earnest situation reflects the dropping expectations and valuations for fintechs with lower levels of venture capital flowing into them, the San Francisco Business Times reports.
GOED offered Earnest a tax rebate of up to $2.8 million as an incentive to open an office here. In order to receive the rebate, the average wages of the jobs created in Utah have to exceed 110 percent of the county average, which is $49,449.
The new jobs are projected to pay about $63.6 million in wages over five years with new tax revenues of $14 million.
The company is still researching sites for its new offices.
Earnest provides student and personal loans, and its website touts its services as “lower rates through better data.”
Other fintechs focused on lending and banking functions with an office in Utah or plans to expand here are Prosper Funding LLC, Snap Finance and MX Technologies Inc.