Lendbuzz, a Boston-based company that uses data and machine learning to innovate car financing, has raised US$345m in funding of its own.
The fintech’s latest capital raise includes US$45m in equity funding and a US$300m forward flow facility. The round was led by Group 1001, with participation from existing investors like 83North, O.G. Venture Partners and MUFG Innovation Partners.
The “sizeable commitment” will help the firm to deepen its investments in product innovation and R&D, which underpin its lending model. Founded in 2015, Lendbuzz uses AI, ML and alternative data to give consumers better access to credit when they’re buying a car. The company assesses the creditworthiness of the consumer across the full credit spectrum, including those consumers underserved by traditional banks and lenders, and then provides dealer partners with a proprietary software that speeds up the loan process.
The fintech company claims to make it quick and easy to apply – whether it’s for new finance or to refinance an existing vehicle – with applications processed in a matter of seconds.
Lendbuzz at ‘forefront of ML in consumer credit underwriting’
LendBuzz’s solution could prove invaluable against the backdrop of a US automotive market where the gap between those who can afford to buy a new vehicle, and those who cannot, only appears to be widening. According to Kelley Blue Book, the average price of a new vehicle rose from US$38,635 in August 2020 to US$48,451 in August this year.
Indeed, the fintech lender will be hoping that the new backing will help to turbo-charge recent successes; Lendbuzz’s revenue increased by 135% in 2022 and by more than 80% in the first half of this year, exceeding US$200m in annual revenue run-rate.
Amitay Kalmar, Co-Founder and CEO of Lendbuzz, says: “While many companies and industries are just starting to realise the impact of AI, we have been at the forefront of utilising deep neural networks and machine learning technology in consumer credit underwriting.
"Our focus remains on using alternative data and machine learning to provide better access to credit for underserved populations, and better software solutions for our growing network of dealership partners nationwide."
Peter Guetig, Managing Director at Group 1001, continues: "Lendbuzz is a unique example of a company demonstrating accelerated growth, along with impressive unit economics. We're excited to further strengthen our relationship."
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