Earnest is said in talks with First Republic

Earnest Inc, an online lender, has held discussions with First Republic Bank, two sources said.

Earnest’s talks were about a sale, one of the sources said, warning that the discussions were “not official.” The San Francisco company is seeking bids of around $200 million, Bloomberg reported earlier this month. Barclays is advising on the process, sources said.

Alternatively, Earnest is seeking an equity injection of $50 million, Crowdfund Insider.com said. 

Founded in 2013, Earnest provides low-cost personal and home loans as well as student loans. The company’s biggest business is refinancing student loans, the New York Times said in 2015. Earnest employs about 150 people, press reports said. Last week, Earnest said it was expanding into Utah, adding about 500 jobs.

The company has raised more than $300 million in four rounds, according to Crunchbase. In March, the company collected $9.8 million from investors including Maveron and Wildcast Venture Partners, press reports said. Earnest in 2015 raised $275 million in debt and equity. Battery Ventures, with participation from Adam Street Partners and Maveron, led the equity, while the debt came from New York Life Investment Management and others.

Other Earnest investors include Andreessen Horowitz, Atlas Venture and Correlation Ventures, Crunchbase said.

First Republic, also of San Francisco, is a bank and wealth-management company. It has a $15.2 billion market cap.

First Republic provides financing for PE and VC firms. The bank was previously owned by private equity. Firms including Colony Capital, General Atlantic, Pine Bridge and GI Partners owned a roughly 60 percent stake in First Republic before it went public in 2010.

Executives for First Republic declined comment. Earnest did not return calls or messages for comment. Barclays could not be reached.

Action Item: Call Louis Beryl, Earnest’s founder and CEO, at +1 888-601-2801

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