London-based consumer loans-focused fintech Abound has raised over £500 million in a new funding round. According to the company, this working capital will be used to “turbocharge growth of affordable loans” in the UK market. To date, the startup has raised approximately £540 million.
The mixture of debt and equity funding was provided by (Debt) Citi, and clients of Waterfall Asset Management, and (Equity) K3 Ventures, GSR Ventures, and Hambro Perks.
In order to support said “turbocharging” in the UK, in addition to expanding its customer base, the company says that they plan to significantly increase its headcount, as well as develop a B2B offer that will allow other banks and lenders to leverage their technology, which, sounds very much like an integrated white label offer to this author.
Along the lines of what Prograd is up to, or auxmoney, Abound is using artificial intelligence and Open Banking data to generate a holistic profile of loan applicants, resulting in a mechanism that can offer borrowers better interest rates than traditional institutions that often rely on a credit score alone.
Through its pre-screening mechanism and ability to continually keep an eye on the lendee’s finances, the company reports that customers default on their loans 75% less than the industry standard.
The startup offers personal loans between £1,000 and £10,000 repayable for up 5 years with a 24.8% APR (representative).
“Our approach to lending remains unique in the finance industry and this latest investment, which comes from a mixture of tech multinationals to global banks, is a testament to the demand and success of our service, particularly in this current challenging economic landscape,” commented Abound co-founder and CEO Gerald Chappell.