Abound, a UK-based AI banking startup, has secured £500m in new funding from investors to expand its customer base, invest in technology, and finance loans. The company uses real-time data from customers’ bank accounts to manage incomings and outgoings to create credit scores for near-prime customers who may be rejected by traditional lenders due to their lack of credit history. Abound provides loans between £1,000 and £10,000 with repayment periods of up to five years and aims to loan out £1bn by 2025. The latest funding round primarily consists of debt provided by Citi and Waterfall Asset Management, with equity provided by K3 Ventures, GSR Ventures, and Hambro Perks.
Abound has raised £500m in new funding primarily consisting of debt provided by Citi and Waterfall Asset Management, with a smaller portion of equity provided by K3 Ventures, GSR Ventures, and Hambro Perks. The funding will be used to expand Abound’s customer base, invest in technology, and finance loans.
Abound’s latest funding round follows two earlier funding rounds that raised £32m and £40m respectively, both in the previous month. The company is using primarily debt financing to fund its growth and expansion plans.
Abound uses AI-based risk and lending profiles to perform “financial X-rays” which help the company understand true affordability when it comes to lending. According to Abound’s CEO, Gerald Chappell, the company has a default rate 70% lower than the UK industrial average. The company was founded in 2020 as Fintern by Chappell and Michelle He, the chief operating officer, who was formerly a director at EY in London.
Abound’s unique approach to lending, which uses real-time data from customers’ bank accounts to create credit scores, has proven successful, with the company on track to loan out £1bn by 2025. The company’s latest funding round of £500m, consisting primarily of debt financing, will be used to fund Abound’s expansion and investment in technology. With a default rate 70% lower than the UK industrial average, Abound’s use of AI-based risk and lending profiles has set it apart from traditional lenders.
