UK fintech Abound secures up to £800M to expand access to fair credit

London-based credit technology company Abound has announced a new financing round of debt and equity combined which in aggregate, according to the company, could extend up to £800 million, expanding total funding to up to £1.3 billion. In March last year the company secured over £500 million in debt and equity funding.

Abound has issued over £300 million in loans to date and is aiming to double the size of its team from 65 to 130 people this year.

Abound’s AI technology, Render, scans customers’ bank 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 sees 75 per cent fewer defaults than the industry standard.

Therefore the company  can offer lower interest rates to consumers than they can typically find elsewhere. 

The new funding comes on the back of continued growth, with Abound reaching profitability just three years after launch.

 The new funding includes a multi-year asset-backed debt financing arrangement (backed by loan originations) from existing financier Citi, while Silicon Valley-based GSR Ventures led the Series B equity round.

Michelle He, the co-founder of Abound and Render, said:

“Open Banking has empowered consumers to take ownership of their data to get more personalised financial products. With Abound and Render, we’re showing that this can often mean they can access cheaper rates. We strongly believe that this is the future of lending.

The Credit Scoring system is dated and omits crucial pieces of the puzzle, like whether someone can actually afford to repay the loan. For those ready to embrace Open Banking, Render can offer them more accurate checks and, therefore, lower costs and risk.

Quite simply, the technology works, and that is why we continue to grow at such a pace and why our investors continue to back us.”

Jefferson Chen, partner at GSR Ventures, said:

“We are thrilled to expand our partnership with Abound, which is harnessing the power of AI and open banking to revolutionise credit decision-making. Their data-driven approach allows for more accurate risk assessments, enabling 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 their 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 roll-out Render, its proprietary AI credit technology platform, globally.

Lead image: Michelle He (Co-Founder and COO at Abound & Render) and Gerald Chappell (CEO and Co-Founder at Abound & Render).