It’s the kind of car ride that tells you everything you need to know about the DNA of Pagaya’s founding team. Three friends — Gal Krubiner, Yahav Yulzari, and Avital Pardo — on a road trip, deep in discussion. It was not small talk, but a full-on debate about a business problem they just couldn’t let go of. Each one saw it differently. Each one brought a different perspective and challenged the others. The debate came with arguments, pushback, and laughter — the kind of exchange that only happens between people who trust each other completely.
By the end of the day, they hadn’t just talked — they had figured something out. Not a perfect solution, but clarity started to take shape through the chaos. That night, over a good meal and a bottle of wine, they weren’t just satisfied with where they landed — they were simply enjoying being together.
To me, that dynamic captures the essence of Pagaya’s entrepreneurial story. A founding team that debates constantly, solves problems, and — maybe most importantly — enjoys the ride together. Real partnership. Deep trust. A willingness to challenge and be challenged. That’s a pillar of their success.
So what is Pagaya?
Pagaya has created something big. It’s a network that quietly powers a large part of the U.S. lending market. They’ve built the rails that connect banks and lenders with institutional investors, and opened access to credit for millions of Americans the traditional system has overlooked.
They’ve done it by building alternative underwriting models powered by AI, trained on trillions of dollars in borrower data — models that look beyond credit scores to understand real risk.
Pagaya built a win–win–win model. First, it unlocks access to credit for millions of Americans who don’t qualify under traditional models, even though they’re creditworthy. Second, it enables banks to approve more customers in real time, while staying within their risk appetite — helping them better serve and monetize every lead. And third, it gives investors access to a high-performing asset class in consumer lending, one they previously couldn’t reach or properly underwrite on their own.
Pagaya connects all three.
Pagaya’s scale today is remarkable – over $28 billion in loan volume, partnerships with more than 130 financial institutions, and over $1 billion in annual revenue in 2024.
I’ve met dozens of founders who pitched this vision throughout my career. Some built solid businesses. But Pagaya is the only one I’ve seen execute this idea at real scale — not just locally, but globally.
So I sat down with the founders to understand how they actually did it. Here are four lessons I took from the entrepreneurial journey of Pagaya.
The story of Pagaya didn’t begin with a startup idea. It began with three people who, long before the business existed, were building a future they hadn’t yet defined — but knew would come.
Gal and Yahav’s friendship took root in London. Gal was working as a banker at UBS, already deep in the world of private credit and asset management. He understood the system. He knew the players, the flows, the misaligned incentives. And beyond seeing how capital moved, he had the financial skillset to design a business model that could realign those incentives and make the system work better.
Avital, a tech genius by every measure, chose to work at Fundbox to get close to the heart of lending and explore whether there was real potential in solving underwriting limitations. He saw firsthand how traditional underwriting worked — and where it fell short. He built, with his own hands, alternative models that proved they could assess risk more effectively. He knew it was possible to do better. Much better.
Yahav was the engine and the fuel. He brought the coordination, the rhythm, the urgency. Having spent years as a competitive football player — and specifically a goalkeeper — he learned to read the field, anticipate what was coming three steps ahead, and keep the team moving in sync. He was the one who made sure they weren’t just dreaming, but preparing — building themselves for the moment they all knew would eventually come.
When they finally came together, it didn’t feel like formation — it felt like activation.
What made the founding team work wasn’t just friendship. It was years of preparation — each of them becoming exactly who they needed to be for the company they hadn’t started yet.
Founder lesson: A great founding team isn’t something you find. It’s something you build — with intention, with respect, and with people you’re willing to fight hard with — and build harder alongside.
When Pagaya started out, what they wanted was to prove a point — that their model could select risk better than the traditional system. And to do that, they needed to find a smart, lean way to validate their thesis.
Becoming a lender would have required a license and operational infrastructure — it didn’t make sense to build all of that just to prove a concept. So they got creative.
They raised a small amount of capital from friends and family and started testing their underwriting engine on real loans. This was during the early days of peer-to-peer lending, when platforms like Prosper and LendingClub were at their peak. Instead of launching a product, they used those platforms to invest directly in loans that the model identified as high quality. No infrastructure. No layers. Just testing the signal.
They built a small portfolio, and it worked. The returns were strong. More than anything, they proved that their model could assess risk better — not just in theory, but in practice.
It was an elegant MVP. It creatively used the platforms available at the time and was a smart way to shorten the distance between idea and proof. There was no brand or storytelling—just performance.
With that early traction in hand, they moved to the next challenge – access to real volume. They began approaching banks, offering to plug in their underwriting engine and help them approve more customers. But they quickly realized that selling risk models to banks was far from simple — especially not back then – not as outsiders, and definitely not with “AI” or “machine learning” appearing anywhere near the word “underwriting.” Time after time, they’d sit around a table and sense the discomfort. And when a risk officer eventually said the word “black box” — and someone always did — they knew the meeting was over. The conversation wasn’t just stalled; it hit a dead end.
So they adapted.
Pagaya shifted its strategy toward investors and lending partners, and began building credibility and trust from both sides. They progressed from smaller partners to some of the leading investors and banks in the world.
But that’s not the real story here. The story is their mindset — that ‘no’ is the closest answer to ‘yes’ — a belief deeply embedded in Pagaya’s DNA. No rejection (and there were many) ever made them stop. Every ‘no’ became a prompt to reflect, refine, and keep moving.
Founder lesson: Rejection isn’t just something you get through. It’s something you learn from — and if you’re listening closely, it usually contains the path forward.
Most startups focus on building a product, serving a customer, and proving a use case. Pagaya chose arguably the most complex path of all — building a financial network.
From day one, they weren’t just developing a technology and a business. They were managing two interdependent sides of a market: raising capital from institutional investors on one end, and partnering with lending institutions on the other. Balancing both sides of the market — especially through macro cycles and volatility — adds a layer of complexity that most startups never encounter.
And on top of that, their business is tightly — and constantly — tied to the macroeconomy. When interest rates rise, lending slows. Capital retreats. Risk appetite shifts. Foundational rules of the game change in real time.
Pagaya had to navigate those shifts while continuing to perform for both sides of the network. That meant building relationships with financial institutions, adapting to market cycles, and managing liquidity and risk at scale. When investor demand outpaced credit supply, they learned to rebalance. And when rates rose and lenders lost access to affordable capital, Pagaya leveraged the market environment to deepen relationships with lending partners, aligning incentives for long-term collaboration.
Founder lesson: When you’re building a fintech network, you’re not just launching a product and tech;. you’re balancing incentives, liquidity, and trust in real time. It’s much harder. But when it works, you haven’t just innovated — you’ve become a market maker.
Pagaya went public after the main IPO window of 2021 had already closed — during a period when the SPAC market was beginning to cool, and investor sentiment toward such deals had become increasingly cautious. The public debut happened under challenging conditions, with rising market volatility and declining enthusiasm for SPAC transactions.
Despite the environment, Pagaya successfully completed its merger and became a publicly traded company.
Why did they decide to IPO? Because they understood what it could unlock.
The founders love to say that going public marked a deeper shift — the moment they stopped thinking like a technology company and started operating like a risk-management institution. That shift drove everything, including the structure of the leadership team and the organizational structure.
To become a true financial institution, they needed more than growth. They needed credibility. Transparency. Trust. Going public gave them that foundation. And it’s what enabled them to close deals with some of the largest players in the market, including institutions like US Banks and others — deals that wouldn’t have been possible before.
This wasn’t a liquidity event. It was a strategic decision — a signal that they had matured and were ready to operate at the center of the financial system.
Founder lesson: Going public isn’t just about access to capital. It’s about earning the right to operate at the center of the market. When the world sees you as a financial institution — not just a startup — everything changes.
VP of Fintech
