Lending fintech Abound raises £500m in largest round to date

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

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

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

The latest venture round includes a combination of debt and equity financing. Debt funding 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 the number of employees, develop its B2B offer and increase the number of customers in the UK.

The increase is particularly timely, with many UK consumers currently being squeezed by cost of living pressures. As household budgets face the strain, an estimated 15 million 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 customers miss repayments 75% less than the industry standard, despite taking on borrowers that would be considered riskier by mainstream providers.

Abound’s model ‘has already been proven 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 mix of technology multinationals to global banks, is testament to the demand and success of the service ours, especially in this current challenging economic landscape. Abound has gone from strength to strength since we first launched and we are excited for the next stage of growth as we look to leverage the strong foundation we have built with clients and to revolutionize lending forever.”

Kuok Meng Xiong, CEO of K3 Ventures, says: “We are excited to invest in Abound’s parent company Fintern as it pushes itself to new heights with its latest capital raising. The lending industry is dominated by old practices, such as traditional credit scoring, which ignore the technological development over the past decade. Abound delivers a unique product and differentiated approach that has already proven to work for thousands of customers. We are excited to see Abound’s offerings grow in the years to come.”

Tom Bradley, partner at Hambro Perks, added: “We are delighted to have been the first institutional investor in Abound and we are very excited to follow up to help take the business to the next level. The team has proven us their ability by delivering consistent growth since we first invested and launched their B2B solution for lenders. We look forward to working with them over the long term to revolutionize the consumer lending market.”