UK’s fintech startup Abound secures €0.9B to increase access to fair credit through AI and open banking

London-based Abound, a credit technology company, announced on Tuesday, May 6, that it has secured £0.8B (approximately €0.9B) in debt and equity in a new funding round, bringing the total up to £1.3B (approximately €1.5B). 

The funding round includes a multi-year asset-backed debt financing arrangement from Citi, backed by loan originations. In addition, 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 roll out 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, which comes from a mixture of VC funds and global banks, is a testament to the demand for and success of Abound and Render. It speaks to the confidence investors have in our business to keep growing and in our AI-powered technology to continue transforming consumer credit.”

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 compared to traditional lenders.

The fintech company does this by using its AI technology — Render. 

Render scans customers’ bank 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 right on average but are wrong in almost every case.

The Render technology means that Abound sees 75 per cent fewer defaults than the industry standard. The company claims to have tested the technology on over 5 million credit decisions and reviewed over 3 billion banking transactions.

The UK company currently offers loans between £1,000 (approximately €1160) and £10,000 (approximately €11,600), repayable for up to five years, with a 24.8 per cent APR (representative).

To date, the company has issued over £300M (approximately €348M) in loans to date and is aiming to double the size of its team from 65 to 130 people this year.

Abound is authorised and regulated by the Financial Conduct Authority and registered with the UK Information Commissioner’s Office in compliance with the Data Protection Regulations 2018.

Michelle He, the 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 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 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,” 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 $3.7B under management. 

Notable investments include Nium, Advance Intelligence Group, and Jaris.

Jefferson Chen, partner at GSR Ventures, says, “We are thrilled to expand our partnership with Abound, which is harnessing the power of AI and open banking to revolutionise credit decisions. 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.”