“We’re excited about the environment where interest rates are reducing, but at a very high level, our mission does not change: We try to be the lowest cost of capital for consumers as on the way up, and we try to be the lowest cost of capital on the way down,” Khan told Fintech Nexus.
Logging onto a video call with Sadi Khan, CEO and co-founder of home equity-backed credit card provider Aven, feels like entering a cinematic universe that’s equal parts The Social Network, Good Will Hunting, and Groundhog Day. Khan’s phoning in from an office straight out of central casting for “founder chics”; behind him, a Wayfair-coded grey couch abuts a whiteboard wall saturated with scrawled-out equations, graphs, and strategic timelines. A monstera plant (real or plastic?) nestles in the corner, adding a flash of green to an otherwise greyscale environment; that monochromatic penchant extends to the uniform Khan dons daily, a black long-sleeve shirt and Patagonia puffer, which he says reduces his “cognitive load.” (His blue jeans are out of frame.)
Khan’s at the helm of a company that frames its primary product in mullet-like terms: credit card in the front, home equity in the back. It’s that latter party that makes Aven stand out from the mind-bogglingly crowded marketplace of credit products available to US consumers. By extending debt products tied to home equity lines of credit — as in, using consumers’ homes as the collateral for a credit card — Aven can offer products with half the interest rate compared to vanilla, market-rate-APR credit cards.
“The reason I started Aven was because I saw this graph of credit card debt building up: Since the 1950s, we have steadily, almost monotonically, gone up from zero to a trillion dollars of credit card debt, and the most fascinating thing to me was, when you overlaid that with the cost of capital on credit cards, things have essentially not changed over half a century,” Khan said. “I just thought that that was ridiculous: We can go to the moon, we invented the internet — and, at this point, we’re inventing entirely new currencies — but we haven’t actually, as a society, significantly moved the needle on the cost of capital.”
Resolving that issue requires tackling an inconvenient correlation. When the cost of capital is high, as it is for unsecured credit cards, the ease of transaction is high: For many consumers, it takes a matter of minutes to apply for a new credit card online, requiring relatively little beyond basic biographic information, a social security number, and self-reported annual income. The obverse is true for securitized loans, where the cost of capital is cheaper, but the application process is far bulkier: Appraisals, income verifications, and other sensitive steps can turn credit extension into a multi-week ordeal.
Disrupting that correlation morphed into a multi-year ordeal for Khan and Aven. Working at the intersection of mortgages and credit cards required immersion into the legal nitty-gritty, as well as the invention of entirely new technologies to truncate approval processes while mitigating risk. That’s included, perhaps most strikingly, the invention of a robotic arm to enable remote notarization. Not to mention remote appraisals, underwriting through micro-market data, and automations across origination, customer service, and servicing.
Three years elapsed between Aven’s founding in 2019 — which came less than a year after Khan left Facebook (the tech giant of Social Network fame) — and the launch of its first product, its flagship card, in 2022. The company has signed on more than a quarter-million customers since then; it claims to have saved end users over $200 million through its lower interest rates.
“My favorite line around this stuff is, in as fast as 15 minutes, save 50% or more on your monthly interest rate,” Khan said. “Hopefully GEICO is okay with that, but we’ll find out.”
Aven has launched other product lines beyond its main card, such as HELOCs offering up to $250,000 in up-front cash, as well as credit cards that aren’t tied to home equity.
Aven’s ability to identify, capture, and grow a market has attracted sizable venture checks — most recently a $110 million Series E led by Khosla Ventures, featuring firms like General and Founders Fund in the mix. The company is now valued at $2.2 billion, more than double the billion-dollar valuation Aven netted in its $142 million Series D (July 2024).
But Aven is far from immune from other inconvenient — if not outright ruinous — economic correlations. A spectre is haunting markets: Macro indicators suggest a recession looms on the horizon. The Great Recession, namely its mortgage-backed downfall, might suggest home equity debt products are far from a sound venture and may pose systemic risk once more. (Talk about Groundhog Day.) But Khan is careful to note that Aven extends debt products featuring loan-to-value (LTV) ratios far smaller than those of the overleveraged products that contributed to the ’08 crisis; provides enough LTV wiggle room for home values to come down dramatically; lends almost exclusively to prime and superprime borrowers; verifies borrowers’ income; and is subject to post-recession legislative safeguards, such as Dodd-Frank.
“I do think some strong and healthy regulations were passed post-’08 that try to protect consumers — and frankly, lenders as well,” Khan said.
Granted, some of these regulations and the agencies responsible for their enforcement are being fed into the wood chipper by the Trump Administration. Perhaps most prominently, the Consumer Financial Protection Bureau (CFPB) — which published the credit-card debt graph that inspired Khan to start Aven in the first place — is now a shell of its former self. An increasingly hands-off approach to consumer rights and finance-sector oversight, arising from DOGE-driven workforce reductions as well as policy changes, may further exacerbate the state of consumer welfare in a bear market.
Aven is not immune to a sharp downturn. On the one hand, its borrowers may fall behind on payments at higher rates, potentially putting their collateral, their homes, in peril. Khan notes that Aven offers a foreclosure protection guarantee to some borrowers, covering up to $10,000 in credit card balances for up to a year following a job loss. Khan also says he can “count on [his] fingers” the number of homes on which Aven has foreclosed, especially as mortgage providers tend to take charge if a homeowner has fallen delinquent.
On the other hand, anticipating further rate reductions from the Fed, Aven is primed to launch a mortgage refinancing solution. And, for borrowers with variable-rate APRs, Aven will pass on the decreased cost of capital to consumers by lowering their credit cards’ interest rates.
“We’re excited about the environment where interest rates are reducing, but at a very high level, our mission does not change: We try to be the lowest cost of capital for consumers as on the way up, and we try to be the lowest cost of capital on the way down,” Khan said.
In a September interview with EO Studio, Khan described a love for predictability. “If I were to know everything that will happen to me between today and my death, I’ll be very happy. I have no need for surprises or excitement,” he said. “I love boring: Boring is great.”
Bear markets are far from boring. How this push-pull duality of credit crunches and cheap credit affects Aven, its borrowers, and household health writ large, is undetermined. Whatever the outcome, Khan’s uniform is already laid out.