Lendbuzz, a fintech that aims to disrupt the existing car financing market using machine learning algorithms, announced that it has secured an additional $150 million in debt and equity financing.
The equity funding round was led by 83North with participation from existing investors. The debt funding was led by BHI, ConnectOne Bank, IDB Bank, Viola Credit and a large insurance company. This raise follows a $30 million debt funding round that was completed only one year ago.
“This is a significant step forward,” Amitay Kalmar, co-founder and CEO of Lendbuzz, said in a statement. “The capital will allow us to further accelerate our fast-growing car financing platform and enhance our ability to provide the best terms to borrowers that do not have an established U.S. credit history.”
Lendbuzz’s financing model – powered by machine learning and proprietary algorithms – allows it to better assess the creditworthiness of consumers with limited U.S. credit history, who are underserved by traditional banks despite their potentially high creditworthiness.
The company partners with auto dealerships to offer customers attractive financing solutions for car purchases. Lendbuzz’s unique solution helps consumers to obtain financing when purchasing a car which in turn also helps build their credit score.
The company enables auto dealerships to close on additional business opportunities, which otherwise would have been lost and serve a more diversified client base. In 2018, Lendbuzz’s loan originations grew 320 percent, and the company increased its dealership network across the country to include the California and Florida markets.
According to various estimates, more than 43 million foreign-born nationals live in the U.S., of which 27 million are working professionals. Lendbuzz taps into this large market, providing credit solutions for customers with solid financial backgrounds who find themselves without proper credit solutions.
“We developed a unique underwriting platform based on alternative data points to evaluate credit risk,” Dan Raviv, co-founder and CTO of Lendbuzz, said in a statement. “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.”
