One of the country's largest online lenders is cutting jobs and shelving expansion plans in response to investors' rapid retreat from the beleaguered sector.
Avant, which specializes in loans to consumers with subprime credit scores, said Friday that it is laying off nearly 60 employees. The Chicago-based firm also said that it is delaying plans to offer refinanced auto loans and credit cards, and to expand into Australia.
"Yesterday we made the difficult decision to eliminate a small number of positions across our organization," the company said in an emailed statement. "We made this move to align our resources with a narrowed focus on our core personal loan product."
The belt-tightening at the privately held Avant is the latest bad news for a sector that has been recently beset by funding troubles.
Last week, Lending Club ousted its founder and chief executive officer amid a scandal linked to the firm's efforts to continue selling loans to a newly skeptical Wall Street. Earlier this month, Prosper Marketplace announced that it was laying off more than a quarter of its workforce after its loan originations fell by 12% in the first quarter.
Avant experienced a 27% drop in loan volume during the first three months of 2016, the Wall Street Journal reported last month.
"We saw the capital markets really change in the beginning of the year, and we were the first lender to take appropriate action," Avant CEO Al Goldstein told Crain's Chicago Business, which first reported the layoffs. "We saw what happened to the other lenders who didn't."
Since its founding in late 2012, Avant has originated more than $3 billion in loans in the U.S., Canada and the United Kingdom.