UK Fintech Abound Raises £500m to Turbocharge Growth of Affordable Loans

Abound, a personal lending fintech that uses artificial intelligence and Open Banking to provide more accurate and affordable loans, has raised over £500m in funding to accelerate growth in the UK market.

Founded in 2020 by two senior credit experts, Abound has created a way to offer borrowers better interest rates by looking at their complete financial picture, through Open Banking and artificial intelligence, instead of relying on just a credit score. By doing so, Abound can also safely lend to many borrowers who have been ignored by traditional banks, while reducing the risk of doing so. To date, Abound has grown 30% month-on-month and served over 150,000 customers through the service.

This latest investment brings the total raised to date by Abound to £570m. The new funding will be used to expand the number of customers it lends to, as well as significantly increase the number of employees at Abound. Funding will also be used to develop their business-to-business offering, allowing other banks and lenders to take advantage of the technology. Abound is on track to have £1 billion on the balance sheet by 2025.

The new financing round includes both debt and equity financing. Debt financing came from Citi, the US multinational investment bank, and clients of Waterfall Asset Management, a global options manager. Equity investors included K3 Ventures, GSR Ventures and Hambro Perks – which led the previous equity round for Abound. For the round, Abound was advised by the leading international law firm Osborne Clarke LLP.

It is estimated that over 15 million people in the UK are currently struggling to borrow for unexpected costs, with many with poor credit scores having to accept unacceptably high or unrealistic interest rates. Through its unique service that can instantly “x-ray” people’s finances, Abound continues to offer better rates than major lenders and has found that customers miss repayments 75% less than the industry standard.

Gerald Chappell, CEO and co-founder of Abound, said:

“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 our service, particularly in this current challenging economic landscape. Abound has has gone from strength to strength since we first launched, and we’re excited for the next stage of growth as we look to leverage the strong foundation we’ve built with customers, and to revolutionize lending forever.”

Krishin Uttamchandani, director at Waterfall Asset Management, said:

“Waterfall is excited to be part of Abound’s business expansion as it seeks to use open banking in a more informed way to help the consumer. Abound is led by a strong leadership team that we are excited to work with, supported by, what we believe is, a robust technology stack, underwriting methodology and view of risk.What Abound has achieved in its first two years of lending has been very impressive and should lay the foundation for a strong platform to better serve customers who will be able to access cheaper credit with open bank We are delighted to be a partner in the Abound journey.”

Kuok Meng Xiong, CEO of K3 Ventures, said:

“We are thrilled to invest in Abound’s parent company Fintern as it soars 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 developments of the past decade. Abound delivers a unique product and a differentiated approach that has already been proven to work for thousands of customers. We are excited to see Abound’s offering grow in the years to come.”

Tom Bradley, partner at Hambro Perks, said:

“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 its mettle 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.”