Jordan Miller is co-founder and CEO of Yendo [Photo LinkedIn]

Dallas-based fintech Yendo has raised $165 million in debt and equity to expand its platform, which offers credit backed by auto equity.

The company announced the closing of a $150 million debt financing led by i80 Group and a $15 million equity financing from undisclosed strategic investors. The capital will be used to fuel customer growth, introduce new products and accelerate offerings in all 50 states.

Yendo, which is touting the first vehicle-secured credit card, said the funds would allow it to extend credit to more Americans at affordable rates. The fintech startup, launched in 2021, allows people to take out loans in exchange for equity in their vehicles. Billionaire investor from Dallas Mark Cuban supported Yendo (formerly Otto) through its seed and Series A funding rounds as the company aimed to disrupt subprime lending with more affordable vehicle-backed credit products.

The fintech startup, launched in 2021, allows people to take out loans in exchange for equity in their vehicles. Dallas billionaire investor Mark Cuban argued Yendo (formerly Otto) through its seed and Series A funding rounds as the company aimed to disrupt subprime lending with more affordable vehicle-backed credit products.

In 2022, the company (then Otto) raised a $4.5 million seed round led by Uncommon. Last year, the company raised a $24 million Series A funding spin led by FPV Ventures and grew its business by more than 700%.

“We have proven that there is a need in the market for a product like Yendo, and this round of debt financing from i80 Group will allow us to expand access to affordable credit to more Americans in more geographies,” Jordan Miller , CEO and co-founder of Yendo. said in a statement.

Miller said the startup has “an aggressive roadmap to 2024,” adding that “the credit line will allow us to advance our mission and focus on what matters most: providing the best products and experiences to our clients”.

Alternative to the credit card for disadvantaged consumers

Yendo said it provides a vehicle-secured credit card with prime rates to millions of Americans who have historically lacked access to the financial system due to their credit scores.

Through Yendo, less affluent consumers can tap into their car equity to access up to $10,000 in revolving credit at interest rates comparable to unsecured superprime credit cards.

Yendo said the card is also available to customers who don’t yet own their vehicle but choose to refinance their auto loan through Yendo. The company said that as customers pay off their auto loans each month, their Yendo credit card availability increases proportionately.

The company said this fills a gap in the market by offering consumers, who might not otherwise get approved for credit, the opportunity to leverage one of their most valuable assets to enter the financial system and start building their credit .

Financing and product beneficial to all

According to the startup, the financing closed at a time when banks continued to tighten their belts on lending. Citing PitchBook, Yendo said debt deal volume with venture-backed companies in 2023 fell nearly 37% from the previous year, making it the slowest lending year since 2017.

Peter Frank, chief executive of i80 Group, said the company is “excited to partner with Yendo”, adding that the company is targeting “an overlooked segment of consumer finance with an innovative product”.

“[Miller] and the Yendo team have developed a unique offering that creates a win-win for everyone, we are excited to partner with them to expand it,” he said in a statement.

To date, Yendo said it has saved its customers more than $50 million in interest and fees compared to alternative lending products. Yendo is available in 40 states.

The company was founded in 2021 by Miller, George Utkov and Daniel Ashy.

Quincy Preston contributed to this report.

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