Fintech
UK fintech Abound secures up to £800m to expand access to fair credit
London-based credit technology company Abound has announced a new round of combined debt and equity financing which, in total, the company says, could extend up to £800 million, expanding total funding to £1.3 billion. In March last year the company secured more than £500m of debt and equity funding.
Abound has lent more than £300 million to date and aims to double the size of its team from 65 to 130 people this year.
Abound’s AI technology, Render, scans customers’ banking transaction data to understand each person’s unique financial situation and determine how much they can afford to repay each month. As a result, Abound experiences 75% fewer defaults than the industry standard.
Therefore the company can offer consumers lower interest rates than they can typically find elsewhere.
The new funding comes on the back of continued growth, with Abound achieving profitability just three years after launch.
The new funding includes a multi-year asset-backed debt financing deal (backed by loan originations) from existing lender Citi, while Silicon Valley-based GSR Ventures led the Series B equity round.
Michelle He, co-founder of Abound and Render, said:
“Open Banking has enabled consumers to take ownership of their data to obtain more personalized financial products. With Abound and Render we are showing that this can often mean they can access cheaper rates. We firmly believe this is the future of lending.
The Credit Scoring system is dated and omits crucial pieces of the puzzle, such as whether someone can actually afford to repay the loan. For those who are ready to embrace Open Banking, Render can offer more accurate controls and, therefore, reduce costs and risks.
Quite simply, the technology works, and that’s why we continue to grow at this rate and why our investors continue to support us.”
Jefferson Chen, partner at GSR Ventures, said:
“We are excited to expand our partnership with Abound, which is harnessing the power of artificial intelligence and open banking to revolutionize credit decision making. Their data-driven approach enables more accurate risk assessments, allowing them to extend affordable credit to a wider range of customers in the UK and internationally.
Abound is at the forefront of responsible innovation in financial services and we are confident that its solutions will drive financial inclusion on a global scale.”
Abound will use the new funding to expand into prime lending in the UK and to launch Render, its proprietary AI credit technology platform, globally.
Main image: Michelle He (co-founder and COO of Abound & Render) and Gerald Chappell (CEO and co-founder of Abound & Render).