Lendbuzz secures $360M in equity, debt funding

Lendbuzz, an auto lender focused on foreign-born borrowers with thin credit, announced this week it has secured an additional $360 million in debt and equity funding following a 200% year-over-year growth in origination volume in the first half of 2021. Wellington Management, joined by Goldman Sachs & Co and MUFG Innovation Partners, led the Series C $60 million equity round, while Goldman Sachs Bank USA led the $300 million in debt financing, the lender said Wednesday. Boston-based Lendbuzz uses alternative data, machine learning and artificial intelligence to measure the creditworthiness of consumers with limited U.S. credit history, who would typically face higher interest rates. Rather than rely on a traditional credit score, Lendbuzz uses algorithms to analyze other indicators, such as a borrower’s employment and educational background, cash flow and earning potential. As of 2019, there were about 45 million foreign-born nationals living in the U.S., according to Census Bureau data. The fintech originates about $400 million in auto loans annually, Chief Executive Amitay Kalmar told Auto Finance News. This is up from about $100 million in 2019 , when Kalmar noted the company expected to increase originations 150% after tripling its volume from 2017 to 2018. During the past year, Lendbuzz has doubled its headcount to more than 100 employees and is continuing its recruitment efforts with a focus on expanding its sales and engineering teams, Kalmar said. “If you’re outside of the traditional credit system, getting access to credit, or paying what we think is a fair rate for credit, is very hard, because most lenders analyze credit solely based on a credit file or a credit score,” Kalmar said. “The more we can expand our reach to the dealerships and consumers, the more benefit we [have on] the overall ecosystem.” With the latest funding, Lendbuzz will continue investing in its car financing platform to reach more consumers with thin or no credit history, and grow the company’s engineering and machine learning teams, Kalmar said. Lendbuzz will also use the funds to expand into key markets in 2021 and 2022, including in New Jersey, Pennsylvania and Texas, Kalmar added. Lendbuzz works with about 400 dealerships across the U.S. “As we felt more comfortable about loan portfolio performance toward the end of 2020, we started expanding our dealership network again. Most of the growth is adding new dealerships to work with, as well expanding the existing dealership network,” Kalmar said. Since its founding in 2016, Lendbuzz has raised more than $105 million in equity funding and approximately $600 million in debt financing, Kalmar said. In July 2019, Lendbuzz received $150 million in equity and debt financing , which followed a $30 million debt funding round the previous year.

Lendbuzz secures $360M in equity, debt funding

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Lendbuzz secures $360M in equity, debt funding

Since 2016, Lendbuzz has raised more than $700 million

Listen: How legal and mathematical notions of fairness affect AI-driven credit underwriting

Virtual card fintech raises $3M to extend reach in Latin America, Caribbean

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