Fintech
British fintech startup Abound secures €0.9 billion to increase access to fair credit through artificial intelligence and open banking
Abound, a London-based credit technology company, announced on Tuesday 6 May that it has secured £0.8 billion (approximately €0.9 billion) in debt and equity in a new funding round, bringing the total to 1.3 billion pounds (approximately 0.9 billion euros). 1.5 billion euros).
The financing round involves a multi-year asset-backed debt financing agreement from Citi, supported by loan originations. Additionally, the Series B equity round was led by GSR Ventures, a Silicon Valley-based firm.
Abound will use the funds to expand into prime lending in the UK and to launch Render, its proprietary AI credit technology platform, globally.
Gerald Chappell, CEO and co-founder of Abound and Render, says: “A new investment of this size, coming from a mix of venture capital funds and global banks, is a 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.”
Abound: Providing borrowers with more affordable loans
Founded by Gerald Chappell and Dr. Michelle He in 2020, Abound is a financial service that uses Open Banking and artificial intelligence to provide borrowers with more affordable loans than traditional lenders.
The fintech company does this using its AI technology: Render.
– A message from our partner –
Render analyzes customer banking transaction data to understand each person’s unique financial situation and determine how much they can repay each month.
It contrasts with traditional credit checks, which rely on statistical averages, which may be correct on average but wrong in almost all cases.
Render technology causes Abound to see 75% fewer defaults than the industry standard. The company says it has tested the technology on more than 5 million credit decisions and reviewed more than 3 billion banking transactions.
The British company currently offers loans between £1,000 (around €1,160) and £10,000 (around €11,600), repayable for up to five years, with a (representative) APR of 24.8%.
To date, the company has lent more than £300 million (around €348 million) and aims to double the size of its team from 65 to 130 people this year.
Abound is authorized and regulated by the Financial Conduct Authority and registered with the UK Information Commissioner’s Office in accordance with the Data Protection Regulations 2018.
Michelle He, co-founder of Abound and Render, says: “With Abound and Render, we’re 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 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,” adds He.
The investor
GSR Ventures is an early-stage investor in technology companies developing AI-enabled fintech, healthcare technology, enterprise software and consumer platforms.
The firm has more than $3.7 billion under management.
Notable investments include Nium, Advance Intelligence Group, and Jaris.
Jefferson Chen, partner at GSR Ventures, says: “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.”