Abound raises £800m in debt and equity as it eyes UK expansion

UK-based credit technology company Abound has secured new funding, which could extend to up to £800 million in debt and equity, as it prepares to expand in the UK.

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

Abound, which uses AI and Open Banking to understand whether individuals can afford to repay a loan, recently announced it has reached profitability, three years after launch.

It intends to use the funding, which takes its total funding to £1.3 billion, to expand into prime lending in the UK, and to rollout Render, its proprietary AI credit technology platform, globally.

Render works by scanning customers’ bank transaction data to understand each person’s financial situation and determine how much they can afford to repay each month, resulting in 75% fewer defaults than the industry standard.

Abound recently revealed plans to double the size of its team from 65 to 130 people this year, having issued more than £300 million in loans to date.

Gerald Chappell, CEO of Abound

Gerald Chappell, chief executive officer and co-founder of Abound and Render, said: “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.”

Jefferson Chen, partner at GSR Ventures, added: “We are thrilled to expand our partnership with Abound, which is harnessing the power of AI and Open Banking to revolutionise credit decisioning.

“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.”

Banks and traditional lenders across Europe are already using Abound’s Render technology.

Michelle He, co-founder of Abound and Render, called the UK’s credit scoring system “dated” and said it “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,” she added.

“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.”