- Fintech SMB lender BlueVine just hired its first COO.
- Steve Allocca joins with decades of experience at LendingClub, PayPal, and Wells Fargo.
- Allocca will drive BlueVine’s banking strategy, an expansion from its bread-and-butter lending.
- See more stories on Insider’s business page.
Steve Allocca wasn’t looking for a new C-suite role when he stepped down as president of LendingClub last May. Instead, he was mulling over his own fintech ideas, likely in the small-business space after 2020 shone a spotlight on the challenges faced by small-business owners.
A SPMB executive recruiter looking to fill a chief operating officer role at small-business lender BlueVine asked industry veteran Allocca if he had any names to recommend. Ultimately, he took the job himself.
“Eyal and I were probably long overdue to meet anyway,” Allocca told Insider, referring to BlueVine’s founder and CEO Eyal Lifshitz. “We met literally for the first time just a few months ago, and we immediately hit it off.”
Realizing the two were eyeing the same opportunity in small-business fintech, Allocca decided to join BlueVine as its first COO.
Allocca’s remit will be broad. He’ll be responsible for day-to-day operations, revenue and go-to-market strategies for BlueVine’s offerings, and risk management.
Former chief commercial officer Brad Brodigan stepped down in January, joining the wholesale-payments team at JPMorgan Chase. Allocca will also manage all CCO responsibilities as COO.
“I view my primary charge as being about enabling Eyal’s vision for BlueVine, driving operational efficiency, and helping to drive multi-product adoption of BlueVine’s products as we continue to scale,” Allocca said.
BlueVine got its start in 2013 as a small-business lender, but has since evolved into a full suite of banking offerings for businesses, including checking accounts, launched in October 2019, and payments, launched in October 2020. The bank offering is in its early stages, with 40,000 active checking accounts with $250 million in deposits.
The pandemic “helped to validate the importance, from a business-model perspective as well as from a customer perspective, of an online-lending business model broadening and having a banking offering,” Allocca said.
The fintech has raised $242.5 million in equity capital to date from investors including Citi Ventures, Menlo Ventures, and Silicon Valley Bank Capital, as well as $600 million in debt financing. The company has never publicly disclosed a valuation.
Allocca didn’t offer details about BlueVine’s ambitions to go public. But his experience scaling companies like LendingClub and working at large public companies like PayPal and Wells Fargo was important to BlueVine, he said.
“What we’ve seen to date is really just the very beginning of the potential for this company,” Allocca said. “Whether it’s public or not public, the reason I’m here is that I see tremendous opportunity to continue to accelerate the scale of this business.”
BlueVine is also on the hunt for a CFO. Until they hire one, CFO responsibilities are shared among Lifsthiz, BlueVine’s CEO, Robin Poore, VP of capital markets, and Tanner Wilcher, and VP of strategic finance and financial planning and analysis.
Allocca will help BlueVine dive deeper into banking
Linking lending with banking is a familiar strategy for Allocca, having overseen Lending Club’s announced acquisition of Radius Bank in February 2020. And while Lending Club is focused on consumer lending, Allocca has experience building for small businesses. With PayPal he helped build what’s now called PayPal Working Capital, which allows business customers to borrow based on the amount of their payments already processed through PayPal.
“There’s so much focus on the consumer side, and not as much focused on the small-business side,” Allocca said. “I think there’s actually quite a bit more opportunity on the small-business side, as well as there being more need.”
And as a small-business owner himself, Allocca has seen first hand the challenges of incorporation and the day-to-day management of a company, especially financially. After more than 10 years at Wells Fargo, where he worked on consumer lending, Allocca left and started Loan Science, a software company for student lending. He still serves on the board and is the largest shareholder.
Naturally, Allocca decided to bank with Wells Fargo. With the management team on speed dial, he figured he’d know who to call if anything went wrong.
“You discover that no matter who you are and no matter who you know, at a big traditional financial institution it’s hard to be more than a number,” Allocca said.
BlueVine is looking to nab more customers from big banks
Part of the challenge is that big banks can sometimes be focused more on large, enterprise clients than SMBs. And it’s those smaller clients that BlueVine is targeting, Allocca said.
To be clear, winning clients won’t be easy. Allocca acknowledged banking relationships are sticky, and switching banks is a challenge.
“Banks have spent a lot of time putting a lot of hooks into their customers, which is why I think customers — even in this day and age when money is money and payments are so digital — are keeping their money at a bank earning zero,” Allocca said.
BlueVine is betting that its interest-earning checking account and digitally designed platform will prove attractive to small businesses, especially new ones forming after so many closed last year.
“BlueVine has particularly resonated with newly formed businesses that perhaps don’t have an entrenched, existing business-banking relationship, but need one and are maybe frustrated with the service level they’ve received from their previous providers,” Allocca said.
And while BlueVine is small relative to players like JPMorgan Chase and Wells Fargo, it’s proven it can keep up through programs like the Small Business Administration’s paycheck protection program roll out last year, when big banks prioritized larger clients over small businesses.
BlueVine facilitated more than $4.5 billion in PPP loans last year, and it’s facilitated more than $2 billion so far this year in the second wave.
And Allocca has already seen how fintechs like BlueVine can prove more nimble than traditional players. Last week, for example, the SBA announced changes to the PPP program to include freelancers and sole proprietors. BlueVine was able to incorporate those changes in a matter of days.
“A number of legacy traditional banks that have huge resources and huge customer bases that have these needs, not all of them have been able to, even today, make that change yet,” Allocca said.
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