Lending fintech Abound raises £500mn in largest round so far

Alternative lending fintech Abound, which uses AI and open banking to assess a consumer's risk, has raised £500mn in the firm's largest fundraise to date

Personal lending fintech Abound has today raised more than £500mn in funding, which it says it will use “to turbocharge growth in the UK market”.

It is by far the UK fintech’s biggest funding round, having raised £70mn in total until today, and is also one of London’s largest raises of the year so far. Abound was founded in 2020 by two senior credit experts who wanted to utilise open banking and artificial intelligence (AI) to offer an alternative to credit scores – a lynchpin for so many lenders but often the scourge of borrowers.

As a result, Abound is able to reach consumers who are otherwise overlooked by traditional banks and lenders, all while reducing risk. The company has been growing 30% month-on-month and has served more than 150,000 borrowers since inception.

The latest venture round includes a combination of debt and equity financing. Debt financing was provided by Citi and clients of Waterfall Asset Management while equity investment came from the likes of K3 Ventures, GSR Ventures, and Hambro Perks – who led the previous equity round for Abound. The lender will use the money to increase its headcount, develop its B2B offering and grow the number of customers in the UK.

The raise is particularly timely, with many consumers in the UK currently being squeezed by cost-of-living pressures. As household budgets face the strain, an estimated 15mn people in the UK will struggle to borrow to cover unexpected costs. Those with poor credit scores may be forced into high-interest or high-cost loans. By contrast, Abound says its customers miss repayments 75% less than the industry standard, despite taking on borrowers who would be deemed riskier by mainstream providers.

Abound’s model ‘already proving itself to work’

Gerald Chappell, CEO and co-founder of Abound, says: “Our approach to lending remains unique in the finance industry and this latest investment, which comes from a mixture of tech multinationals to global banks, is a testament to the demand and success of our service, particularly in this current challenging economic landscape. Abound has gone from strength to strength since we first launched and we’re excited for the next stage of growth as we look to capitalise on the strong foundations we’ve embedded with customers, and to revolutionise lending forever.”

Kuok Meng Xiong, CEO of K3 Ventures, says: “We are thrilled to be investing in Abound’s parent company Fintern as it propels itself to new heights with the latest capital raise. The lending industry is dominated by old practices, like traditional credit scoring, which ignore technological developments of the last decade. Abound is delivering a unique product and a differentiated approach which is already proving itself to work for thousands of customers. We are excited to see Abound’s offer grow in the years ahead.”

Tom Bradley, Partner at Hambro Perks, adds: “We are delighted to have been the first institutional investor in Abound and we are very pleased to follow-on to help take the business to the next level. The team has proven us their capability by delivering consistent growth since we first invested and successfully launching their B2B solution for lenders. We look forward to working with them in the long-term to revolutionise the consumer loan market.”

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