Fintech
AI-driven UK fintech Abound announces new funding round to increase access to fair credit
AI-driven UK fintech Abound announces new funding round to increase access to fair credit
London-based credit technology company Abound has announced a new funding round that could overall extend up to £0.8 billion. The new funding comes on the back of continued growth, with Abound reaching profitability just 3 years after launch.
The financing announcement – one of the largest in Europe so far this year – is a mix of debt and equity. 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.
Abound is now one of the UK’s fastest-growing fintech companies, having made over £300m in loans to date, and aims to double the size of its team from 65 to 130 people this year. The new funding includes a multi-year asset-backed debt financing deal (backed by loans) from existing lender Citi, while the Series B equity round component was led by Silicon Valley-based GSR Ventures.
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. This contrasts with traditional credit checks, which rely on statistical averages that may be correct on average but wrong in almost every single case.
Render technology causes Abound to see 75% fewer defaults than the industry standard. As a result, Abound is able to offer consumers lower interest rates than they can typically find elsewhere. This market-leading credit performance is also the reason why existing investors continue to support Abound.
It is estimated that over 15 million people in the UK are struggling to get loans due to unexpected costs, with many with poor credit scores being forced to accept unacceptably high interest rates. Abound’s mission is to change the way credit decisions are made globally so that more people can access loans at rates they can afford to repay, driving financial inclusion.
Abound is leading the use of Open Banking and artificial intelligence in consumer credit decisions. Although this technology is in its early stages, Abound believes it will become a must-have in the lending industry in the next 3 years. Abound is already providing its industry-leading Render technology to traditional banks and credit unions across Europe to support them during the transition to AI.
Gerald Chappell, CEO and co-founder of Abound and Render, said:
“A new investment of this size, coming from a mix of venture capital funds and global banks, is testament to the demand and success of Abound and Render. This demonstrates the confidence investors have in our business to continue growing and in our AI-powered technology to continue transforming consumer lending.”
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 decisions. 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.”