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As long time listeners will know, I love the consumer lending space. So, I am delighted to welcome back to the podcast Matt Potere, the CEO of Happy Money, a position he has held since September 2024. Previously, Matt served as CEO of Sunlight Financial, which he took public via SPAC in 2021. With decades of experience in consumer finance across multiple asset classes, Matt brings deep expertise in credit cycles, risk management, and building successful lending platforms.
In this episode we discuss what differentiates Happy Money, their focus on credit unions, how they approach technology and underwriting, their big new forward flow agreement, the state of the consumer today, their use of AI, why culture is so important and much more.
In this podcast you will learn:
- What attracted Matt to the opportunity at Happy Money.
- How he describes Happy Money today.
- What he learned leading Sunlight Financial that helps at Happy Money.
- Why they have focused on partnering with credit unions.
- Who is the typical customer coming to Happy Money.
- How their origination process works with their credit union partners.
- How they are using automation and AI/ML in their underwriting.
- Matt’s perspective on the state of the US consumers.
- The primary use cases for a Happy Money loan.
- How they differentiate themselves from other fintech lenders.
- Matt’s approach to scaling a lending business.
- How they are using AI tools in their operation.
- How the $500 million deal with Fortress and Edge Focus came together.
- What are his thoughts on an IPO.
- Matt thoughts about adding new products to personal loans.
- What they are focused on for the next 12 months.
Read a transcription of our conversation below.
FINTECH ONE-ON-ONE PODCAST NO. 543 – MATT POTERE
Matt Potere: If I look broadly at the consumer and asset quality across multiple asset classes, by and large, the consumer’s held up pretty well. Credit quality, for the most part, is really strong. And then when we look at our own originations and we look at those most recent vintages, credit quality also remains very strong. And we’re really pleased with credit quality. But that said, we also look at macro indicators to see if there’s something that’s a leading indicator. By and large, the consumer looks pretty strong there, with the exception of consumer confidence. We’ve definitely seen a dip from U.S. consumers over the past few months in their confidence. They’re concerned about inflation. They’re concerned about some of the debt that they’ve taken on on their own personal balance sheets. And so that’s something that we’re watching. But by and large, consumers perform pretty well.
Peter Renton: This is the Fintech One-on-One Podcast, the show for fintech enthusiasts looking to better understand the leaders shaping fintech and banking today. My name is Peter Renton and since 2013 I’ve been conducting in-depth interviews with fintech founders and banking executives.
Today on the show, I am delighted to welcome back Matt Potere, the CEO of Happy Money, a position he has held for almost a year now. Matt was formerly the CEO of Sunlight Financial, and I had him on the show back in 2020. It’s a company that he took public via SPAC in 2021.
In this interview, we cover a lot of territory. Matt talks about what attracted him to Happy Money and what he sees as the through line in his career to date. He also discusses the close partnerships that Happy Money has with their many credit union partners and how they are expanding their capital base in new ways. In particular, the new $500 million forward flow agreement that we talk about in some depth. He touches on how they’re leveraging AI in their underwriting process and why they remain laser-focused on perfecting their core personal loan product before expanding into new verticals. We also explore the state of the US consumer, Happy Money’s approach to scaling their technology platform, and Matt’s philosophy of building company culture, learned initially from his time at MBNA. Now, let’s get on with the show.
Welcome back to the podcast, Matt.
MP: Thanks for having me again, it’s great to see you.
PR: Great to see you. Yes, we’ve last had you on, it was about five years ago, back in 2020. You were CEO of Sunlight Financial. I know you took that company public and you left, I think it was about 18 months ago, if I’m not mistaken. So maybe we can start by giving the listeners a little bit of a background about why you decided to join Happy Money. What was the opportunity that excited you?
MP: Yeah. So, Peter, you know, last September, September of ‘24, I joined Happy Money as CEO and I saw a couple of big macro trends that really fit with how I wanted to spend my time. First, Happy Money, at our core, our mission is to help create a happier lending experience and do it in a responsible way. And if you look out at the environment today, the U.S. economy, the U.S. consumer has over a trillion dollars of credit card debt outstanding. Typical interest rates, you know, 22, 23%. And it’s a real burden to American families. And so it was something I was really focused on wanting to be able to address. And so it was a perfect fit from a mission standpoint. The other thing though that I’d say really aligned well is the culture at Happy Money. You know, I’ve been really fortunate to work at some great places with some terrific cultures. And you know, our core values at Happy Money are love, trust and hustle. And so it was the perfect match in it fit, you know, the broad opportunity was that I was focused on the sort of the business challenge, but it also fit culturally. It’s been a really fun, you know, 10 or so months.
PR: Okay, great. So, then, maybe you could just step back and sort of tell us a little bit about how you describe Happy Money today.
MP: Yeah, so Happy Money is a consumer finance platform. We partner with credit unions, asset managers, and other capital partners to fund high-quality consumer loans. Today, we’re focused on personal loans. So we help consumers, we originate the loan directly, where we market directly to the customer. We originate them, underwrite them on behalf of our capital partners. And we help consumers consolidate their credit card debt to save themselves time and money.
PR: Right. Okay. So when you were with Sunlight, obviously that was really focused on the solar energy, solar panel financing. In fact, after our podcast, I went and got solar panels myself on my own house and financed through you guys. But anyway, how does that, like the experience there at Sunlight, cause you’re, it’s obviously a little bit different to what you’re doing now, but what are some of the things that you learned at Sunlight and how does it compare to what you’re doing now at Happy Money?
MP: Yeah, so I’ve been really fortunate. I’ve spent my whole career in consumer finance, just about every consumer credit asset class. And I’ve really taken all of that experience, including my time at Sunlight, where we funded over, while I was there, we funded over $10 billion in loans. And most of that with credit union partners. And so I’ve taken that experience. I’ve seen multiple credit cycles, and I’ve taken that experience to Happy Money. When I said at our core, we’re a consumer finance platform at Happy Money, it’s really that 30 years of experience where we’re really focused on originating high-quality assets with good risk=adjusted returns for our capital partners, as well as help put consumers in a better situation.
PR: Right. Okay. So when I’m, you know, I’m thinking about Happy Money, I had the previous CEO on my podcast back in 2022, and, back then, it was very much focused on credit unions, and now credit unions are still a focus, but what is it about credit unions? We are going to get to sort of some of the ways you’ve expanded beyond them in a little bit, but I’m curious about what it is about credit unions that makes them so attractive as investment partners.
MP: So, at Happy Money, we have relationships with about a dozen credit unions, including two of the 10 largest credit unions. Credit unions are genuinely focused on members, very mission-focused, which aligns well with the culture that we have at Happy Money. They have a really long view for relationships and are really interested in putting consumers in a better situation. So they really couldn’t be better partners out there. As I mentioned, I’ve had partnerships with credit unions over the years and have funded almost $10 billion in loans with them. So I’ve seen them through some of the most challenging times and some of the best times. Again, there really couldn’t be better partners out there.
PR: Okay. So then could you take us through the typical Happy Money customer today? And I presume you’re not necessarily focusing on a credit union’s existing customer base. You’re focusing on potentially new ones, but tell us a little bit about who takes out a personal loan at Happy Money.
MP: Yes, you’re right. So we are generally bringing new members to the credit unions. It’s one of the advantages that our credit unions like to see through our partnerships. Typical consumer is about 40 years old, has a FICO score in the low 700s, and has about $20,000 in credit card debt that they want to consolidate and save themselves money. And as I said, we go out, we help originate that member, and we bring them to the credit union. So the member not only gets access to a great asset, but they also get a new member that they get to bring into the credit union, which is increasingly important for credit unions who have seen their average age of their members get older so it’s really important to them to be able to bring new members into the base.
PR: So then, when you’re out there in the marketplace and someone comes on to Happy Money looking to apply for a loan, is the credit union sort of front and center, or is it very much in the backend? Because I imagine the loan is originated by the credit union. Maybe explain how it works.
MP: That’s right. Happy Money goes in and originates the loan directly, you know, through SEO or SEM or affiliate partnerships or direct mail or email marketing. We’re originate the borrower. We’ll underwrite them using the credit union’s criteria. And then when it’s time to fund, we’ll introduce that member to the credit union. So we make a connection between the new member and the credit union, and the credit union gets access to that member and the asset itself.
PR: Right. So the credit union gets access to that member, you said, is part of the appeal, then for the credit union that they then get to, you know, market potentially other products to that customer, or is it sort of the credit union’s intent to do that? Tell us a little bit about that.
MP: That’s right. I think even if the credit union could sell another product, it’s attractive for them because they, you know, they add to their member base and they get access to this asset, but they also get the opportunity to cross-sell. You know, to date, we’ve added over 300,000 new members to our credit union partners. So it’s a, you know, it’s an impactful source of new members.
PR: Right, right, for sure. And I imagine it’s a younger demographic than their typical members, I would guess, because that’s one of the things that is sort of common knowledge as a credit union. Average credit union customer is skewing older and older every year.
MP: That’s right. Increasingly, consumers are not going to the local branch to get a loan. They want to go to digital channels. And so we’re present in those digital channels, and we help pull in those new members that the credit union might not otherwise get.
PR: Gotcha. Okay. So then let’s talk about the underwriting process and how you talked about it, this is like 700 plus FICO scores. You know, once someone comes in and applies, how are you using your automation there? I mean, how much machine learning/AI are you using? Tell us a little bit about your underwriting process.
MP: Yeah, the trick these days, and really the trick here, is to make the experience as seamless as possible with as little friction as possible while also having thorough risk management and underwriting. You can’t do one and not the other. And so we’re focused on doing both. We automate as much of the process as we can. So we have a really strong underwriting, we have great asset quality, but we try to make that frictionless. So the majority of customers that we end up funding are automated from beginning to end. There’s no human intervention. And to the extent that we need to document, we leverage AI and other tools to help do that in an automated way so that we can review documents quickly, seamlessly, with high quality, and minimize that friction. So we’re really focused on that.
PR: So does that mean most of the applicants coming to Happy Money get a relatively instant decision, yes or no, with obviously some probably going out into the human intervention, but are most customers getting a very quick decision?
MP: That’s right. Most of the applicants, or most that eventually fund, it’s a near instant decision, and it is always a fully digital experience.
PR: Right. Gotcha. Okay, so I want to take a step back and talk about the state of the US consumer. We are recording this on July 7. I should sort of put that marker in the ground because there are all sorts of numbers coming out of the government based on how consumers are feeling and consumer sentiment. There’s obviously inflation, unemployment numbers, and those sorts of things. I’m curious, from your perspective, when you’re looking at the state of the consumer, what are you seeing? And maybe you could help answer that with, as far as, are you seeing delinquencies start to rise from some of your recent vintages?
MP: Yeah, we’ll look at it from a few different perspectives. So first, if I look broadly at the consumer and asset quality across multiple asset classes, by and large, the consumers held up pretty well. Credit quality, for the most part, is really strong. And then when we look at our own originations and we look at those most recent vintages, credit quality also remains very strong. And we’re really pleased with credit quality. That said, we also look at macro indicators to see if there’s something that’s a leading indicator. By and large, the consumer looks pretty strong there, with the exception of consumer confidence. We’ve definitely seen a dip from U.S. consumers over the past few months in their confidence. And they’re concerned about inflation. They’re concerned about some of the debt that they’ve taken on on their own personal balance sheets. And so that’s something that we’re watching. But by and large, consumers perform pretty well.
PR: And so you find that your primary use case, I believe, is debt consolidation, right? Paying off existing credit card debt, which obviously will have a lower interest rate at Happy Money typically than credit card companies, these days. Is that still the primary use case?
MP: Yes. So today, that’s primarily how our customers use our products. You know, over time, we’ll expand to other uses and to other products as well. But today we’re really focused on helping customers consolidate their debt and save them both time and money.
PR: And then do you have programs where you pay off their credit card debt directly, or does this go straight to the consumer, and you leave it for them to pay off?
MP: It really depends on the consumer. So in some cases we pay it off directly, in other cases we’ll fund the consumer. The key through all of that, though, is that we focus on originating high-quality consumers with strong credit quality that produce high-quality loans so that we can feel confident that that consumer will pay it back over time, and will help put them in a better position.
PR: Okay, so then what is it, I mean, we live in a competitive market. Happy Money is not the only one offering consumer loans right now. Beyond sort of the competition for interest rates when you’re out there in the marketplace, how is Happy Money kind of differentiating itself from some of the, particularly some of the other fintech lenders?
MP; Well, I think first thing is, we’re a large market. And so I don’t think there’s going to be just one winner. There’ll be multiple winners, just like there are multiple winners in lots of other consumer credit asset classes. There won’t be only one. So there’s lots of space for us to operate. But what we hear from our customers, what we call our members, is they love experience that we give them from beginning to end. Not only are our rates competitive and our products attractive, but the experience is seamless and frictionless, and they like doing business with us. Our ethos of trying to put them in a better situation really comes through when they interact with us.
PR: Right, right. So you’ve built lending companies now with billions of dollars in originations, and obviously, Happy Money is not really a startup anymore. It’s pretty well established. I’m interested in how you think about scaling, particularly when it comes to, you know, technology. Some of these lending companies like Happy Money do have significant scale, but I’m sure you want to continue to grow. How do you think about scaling your business?
MP: Yeah, so I said a few times about how important it is to have a frictionless experience and to make it really seamless for consumers. And that’s true. You do that through technology. But what I think is really important is to remember that at our core, we’re a consumer finance platform. When we talk about being with fintech, we sometimes say it’s capital F, lowercase t. And I think sometimes where platforms go wrong is they think that they’re truly the technology company without the financial services aspect. Our tech is there to help make better credit decisions, to give a better experience to our members, and to help ensure our partners get good risk-adjusted returns. And so the tech is a means to an end. We invested heavily, we spent millions and millions of dollars on tech. We wake up every day thinking about how we take the friction out and leverage technology to do so. But it’s really important to remember at our core what we’re trying to achieve. And that helps us create focus so that our tech that we’re delivering is really to further that mission. It’s not to create any piece of software for its own sake.
PR: Yeah, fair enough. So, speaking of software for its own sake, how are you using generative AI or any of the newer AI tools that are out there today? Do you have something in production right now? Are you still exploring? What are you doing?
MP: It’s remarkable how much AI has developed over just the last couple of years. Four or five years ago, everyone would talk about machine learning or maybe start to talk about AI, but it wasn’t real. It seemed like it was more of a banner than the real substance behind it. It’s remarkable now what we can do. So, for instance, the way customers upload documents, we have an AI tool that will review those documents, determine if they’re authentic or not, and use that to help underwrite. It’s just one of many examples of how we’re using AI, and the opportunity here we really think is endless. So we’re investing pretty heavily in AI, both on the day-to-day tactical basis, but also more strategically.
PR: Right. Interesting. Okay. I want to talk about the recent deal that you guys signed, which is actually the catalyst for this interview. It was a big deal with Fortress, one of the biggest names in private credit, shall we say, and Edge Focus, who also have been serving the consumer credit space for many years. Tell us a little bit about how that deal came together. And did this predate you, or is this something that you sort of have been driving forward?
MP: Yeah. So historically, Happy Money funded all of its loans through credit unions.
PR: Yes.
MP: I would say just a little bit before I came, the company started to look at diversifying beyond credit unions. These deals take some time to put together. But over the last nine or 10 months, we’ve been working diligently with a number of parties, including Fortress and Edge Focus. And we were really excited to be able to announce this deal. It’s $500 million forward flow purchase agreement. So it gives us a lot of capacity to continue to grow with, you know, the best of the best. So we’re really excited about it.
PR: So what was the reason to diversify away from credit unions, given that that was something that had been part of Happy Money for a very long time? And obviously, you’re not; it doesn’t sound like you’re stopping that anytime soon. What’s the reason to go out and do a very different deal to what you’ve done before?
MP: What we think about it is it really complements our credit union partnerships. It doesn’t conflict with them. So it allows us to originate loans that we might not otherwise be able to originate with credit unions that may not fit a traditional depository’s risk appetite. It allows us to approve more customers than we could otherwise approve and help more consumers, and to be able to do it with attractively-priced capital. And so the two really fit together very well. So the way you can think about it is it’s not necessarily diversifying the way it’s diversifying our capital base, but it’s really complementing our credit union partners.
PR: So does that mean you are expanding your credit box now from where you used to be before this deal?
MP: It does give us, yes, it gives us more capacity, not only more capacity, but more flexibility in who we’re able to improve because of the nature of our partners.
PR: Right, that makes perfect sense to me. It’s a way, again, this is the way to help you scale. As you said, a $500 million deal forward flow agreement, I think, is something that many, many fintech lenders would love to have. So I want to ask you about your time at Sunlight. You know, you were there for, you’re one of the founders, and you took the company public, which is not an easy thing to do. And I’m curious about some of the lessons you learned from your time there and how you’ve been able to apply that to Happy Money.
MP: Yeah, so I mean, I think there are lots of lessons. I mentioned, I’ve lent in almost every consumer asset class, and my time at Sunlight helped originate $10 billion in solar loans. So it’s going to that experience as well as the credit and partnerships. But probably what I’m most proud of is the culture that I helped to build at Sunlight. And I think still goes really strong today. I was very fortunate. I think the last time we talked, I talked a bit about how I started my career at MBNA and the culture at MBNA was so strong, it set the bar for really what I wanted to build and what I wanted to be a part of. Genuinely cared about customers, which we always capitalized the C. Genuinely cared about employees, which we always called people. Genuinely cared about the community. And so that strength of culture, I tried to bring with me to Sunlight. Fortunately, Happy Money also has a really strong culture. I’ve been trying to further that culture and continue to grow and expand it. So it makes a real difference. It’s not only, doesn’t only feel good, not only is it the right thing to do, but it also produces better results, having a really strong culture.
PR: So then I’d love to know if the board of directors brought you on partly because they want to go public one day. I asked you the question, you obviously can’t speak for the board specifically, but how do you view, you’ve done it once before, how do you view sort of the whole IPO process? The IPO window seems to be opening at least a little this year. What are your thoughts there?
MP: Yeah, I think the first thing we’re focused on is building a great business. If you focus on building a great business, there’ll be exits for the investors, but you have to do the first thing, or the second won’t matter.
PR: Sure.
MP: And so, you know, honestly, at the board level, we’re focused on just building a great company, whether the exit for them looks like an IPO or strategic sale or selling to another private equity firm, because today our investors, all private equity investors, they will eventually sell. Which way or what it looks like? That’s honestly not the discussion that we’re having. The discussion we’re having is really how do we build a great business and how do we make a positive impact with consumers and members, and our capital partners, and the rest of it will genuinely take care of itself.
PR: Right, right. So I want to switch to talking about product suite and your core product, the Unsecured Personal Loan, it’s a massive market. Fintech has really done a great job in really bringing that, expanding that market dramatically over the last decade. But there’s obviously many, many other verticals, you know, all too well. So what can you tell us about how you think about adding new products into what Happy Money offers.
MP: So I think about the core of our business, Consumer Finance Platform, we do really three things. We originate assets, and we do that through direct-to-consumer channels. So our marketing capabilities, one to underwrite risk and make sure it’s priced appropriately, or credit capabilities. And then the access diverse and low cost capital, which is our funding. Those three core competencies work really well on personal loans and are allowing us to grow up our personal loan business. But over time will allow us to add other products. And so, we’re absolutely having ambition to add other products over time and leverage those competencies. That said, we are really focused on doing what we do right now and doing it really well. What we won’t do, and what we haven’t done, is chase lots of products and not do them well. We already do a personal loan really well. We want to be best in the market at that. And then we’ll look to add other products thoughtfully and intentionally over time.
PR: So does that mean that you’re not really looking to add anything in the short term?
MP: You know, let me put it this way. I don’t think we’re going to see an announcement anytime soon on a new product, that’s for sure. You know, we’ll add other products, but we don’t have anything in the works, as of today.
PR: Okay. Okay. So then, when you look at the other, there are obviously some of the companies you compete with that have one or two products. I mean, there are still some companies that are really focused on the unsecured consumer loans. There are many that are doing auto, some are doing credit cards. Some are doing, you know, home equity. What I mean is, with your customer base, you have a lot of flexibility in where you can go, and some of your competitors have entered new markets pretty successfully. Do you feel like that’s part of the long-term vision? You see Happy Money — Happy Money is a great name too, because it could obviously apply to anything. It could apply to deposits. Could apply to, you know, the savings accounts, whatever. You sort of have this, in some ways, massive opportunity, and I’m just trying to get a sense of how, like, the unsecured consumer loan, it’s a great product, can be really profitable. But do you think that for Happy Money to say, for it to achieve its potential, shall we say, you should have a much bigger suite of products?
MP: I do think we have a lot of ambition, and I think you’re right. When we think about the potential and what we can do, leveraging those three capabilities, we absolutely should be able to successfully add other products. We want to really do it intentionally. Where obscene companies make a mistake is enter new markets without doing the product, their core product really well and distract themselves and they distract their teams. In our line of business, execution is so important. And so we really want to make sure to execute on this product really, really well, and then be thoughtful about the next product and execute on that really, really well. And then that gives us the right to add a third. We have to own that right by executing the opportunity in front of us.
PR: Right. Now that makes sense. Okay. So then, beyond expanding the product suite, I’d love to get a sense of what’s top of mind for you, you know, for the next six months and into 2026, what are you focused on?
MP: Yeah, sure. We are, you know, we’re back in growth mode, which is great. You know, many fintechs over the past few years have been constrained on the funding side. We announced a partnership with Fortress and Edge Focus. Many of our credit union partners are, have increased demand for our loans, as do new credit unions. And so we’re focused on continuing to ramp our originations. That’s the near-term focus, doing that while having good sound and strong credit quality. And then we’ll evaluate at that point, whether it makes sense to add a new product or continue to scale this core product.
PR: Okay, we’ll have to leave it there, Matt. As always, great to chat with you. Thanks so much for coming on the show again.
MP: Thanks for having me, Peter. Great to see you.
PR: Okay. See ya.
My relationship with Happy Money goes back a long way, back to when they were known as Payoff. And in closing, I want to tell a little story about Happy Money and their colorful brand. At one of our LendIt events, I can’t remember what year it was, it was a few years ago now, Happy Money had a booth on the show floor filled with massive containers of brightly colored candy. And when I say massive, I mean these containers were at least five feet tall, and filled to the brim with candy. There must have been a million or more pieces in there. Now I remember walking past their booth and thinking how it created this happy impression; that it really personified their brand, I thought. And I think you could hear that today in my conversation with Matt, that the brand and the people are front and center in the organization. Anyway, that’s it for today’s show. If you enjoy these podcasts, please go ahead and subscribe, tell a friend, or leave a review. And thank you so much for listening.