Pagaya, a four-year-old fintech that uses AI to guide institutional investing, announced a $102 million Series D today. The fundraise puts Pagaya’s total funding at $147 million to date. 

“Technology is starting to unlock things that have traditionally sat on the balance sheet of banks and put them into institutional investors’ hands,” said Ed Mallon, chief investment officer at Pagaya. “One of the areas where we started out was an asset class that has been around for decades and decades: personal loans. What [the technology] allows us to do is buy this very interesting risk and underwrite each individual borrower.” 

GIC, Singapore’s sovereign wealth fund, led the round. Other participants were: Aflac Global Ventures, Poalim Capital Markets, Viola, Oak HC/FT, former Amex CEO Harvey Golub, Clal Insurance, GF Investments and Siam Commercial Bank.  

According to Mallon, with the money Pagaya aims to double its workforce, which currently numbers 110 employees, and hire data scientists while continuing to pursue new asset classes. Mallon said Pagaya will pursue auto loans, real estate, mortgage and corporate credit asset classes. The company entered the auto loan space with a fund last year, and this year intends to continue to grow that business as well as enter the real estate assets space. 

Pagaya, which has headquarters in New York City and Tel Aviv, works with institutional investors like banks, insurance companies, pension funds, asset managers, sovereign wealth funds and foundations to help them manage risk. According to the company, it has more than $1.6 billion in assets under management, and its clients include Citibank, Meitav Dash Investments and Bank Hapoalim.  

With fintech funding harder to come by since the start of the pandemic, Pagaya’s Series D is something of a vote of confidence in the company’s technology. According to Pagaya, the company constructs “investment portfolios that aim to achieve short-duration, high yield return profiles.” Mallon said the current difficulties in the market make Pagaya’s AI-driven tools valuable to investors who want to effectively manage risk. Pagaya uses billions of data points to help its clients invest, he explained. 

See also: AI-supported asset manager Pagaya crosses $1.2b in AUM

The use of AI in investing is a growing trend, both with institutional investing fintechs like Pagaya and direct-to-consumer companies like Wealthfront and Betterment.  

“Millennials are much more open to AI and machine learning. They’re interacting with it every day on social media, and in how stores and retailers are reaching out to them based upon their particular buying habits and so forth,” said Michael Chin, managing director and global head of trading at the financial markets data company Refinitiv, in a sponsored post for Institutional Investor. “They’re much more comfortable with it. Since they will be the traders of the future, we’ll likely continue to see more of a shift towards accepting AI and machine learning in the coming years.” 

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