Lendbuzz Secures $150M in Debt & Equity Financing
Lendbuzz, a Boston-based fintech company specializing in car financing for U.S. consumers with limited credit history, has announced that it has secured $150 million in second-round equity and debt financing.
The equity round was led by 83North and other existing investors, while the debt round was led by BHI, ConnectOne Bank, Viola Credit, IDB Bank, and an unnamed insurance firm. These actions come after a $30 million debt funding round in 2018 and a 320% increase in the company’s loan originations as Lendbuzz expanded its services to car dealership markets in California and Florida.
“This is a significant step for Lendbuzz,” says Amitay Kalmar, CEO and co-founder. “The capital will allow us to further accelerate our fast-growing car financing program and enhance our ability to provide the best terms to borrowers that do not have an established U.S. credit history.”
Co-founder and CTO Dan Raviv added: “We developed a unique underwriting platform based on alternative data points to evaluate credit risk. Our AutoML Deep Neural Network system is continuously improving and allows us to evaluate the true credit risk for people with a limited credit file or missing FICO score.”Lendbuzz’s growth highlights the potential of an underserved financial market. At least 48 million American citizens have limited or non-existent credit histories, reports the US Consumer Financial Protection Bureau. It is natural that an AI-based service that helps them ease their troubles with credit risk assessment would find itself in high demand.83North partner Armor Dinur shares this sentiment: “After backing some of the world’s leading fintech companies, we are very excited to join Lendbuzz and support their ambitious growth plans,” he says. “Lendbuzz is addressing a large and underserved market, has innovative technological underwriting capabilities and unique customer acquisition strategy that supports their high growth.”
BHI CEO Gabriel Hamani concurs: “BHI started its banking relationship with Lendbuzz in 2018 and is excited to continue to support the company’s growth into an influential fintech company. The technology sector is core to BHI’s expansion strategy in the US, and we understand the complexities of the tech ecosystem. We’re committed to providing tailored banking solutions and an innovative suite of products to entrepreneurs within the tech sector.”
Lendbuzz says it intends to add 30 employees to the 40 at its Boston offices.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
