‘Financial Freedom’ App Updraft Raises $131M
“Financial freedom” app Updraft has reportedly raised £108 million (about $131 million).
The London-based financial app will use the new capital from its Series A funding round to expand its team, expand its customer base, and invest in new features and products, Tech Funding News reported Dec. 19.
“We are thrilled to close this latest round of funding, where our credit and equity partners have demonstrated their belief in the Updraft team and our mission, especially in the current macroeconomic environment,” Updraft CEO and founder Aseem Munshi said in the report. “It’s a testament to what Updraft is trying to do; offers real solutions to clients to help them find their financial freedom.”
Since its founding in 2017, Updraft has used open banking technology to build a complete picture of users’ spending and applied machine learning (ML) to help its members make positive changes. According to the report, the company recently added buy now pay later (BNPL) products as well.
The latest funding round follows an earlier one in which Updraft raised £72 million (about $87 million) in a debt and equity round. According to the report, the previous round was led by NatWest and the latest led the debt portion, while LC Nueva, Auluk Investments and Faber Capital lead the equity portion.
“Combined with lean user and lending growth strategies with best-in-class risk models that outperform bureau-based credit risk models, we are confident in Updraft’s growth momentum,” NatWest director of financial institutions Rob Lamont said in the report. “They are on track so far against all key measures with new user growth, new lending, balance sheet, income, write-downs and overall net margin all on track.”
Updraft did not immediately respond to PYMNTS’ request for comment.
It builds a picture of the consumer based on Updraft’s credit reference data, which combines information from multiple bank accounts and real-time data on costs and credit card interest rates provided by the open bank. This allows the true cost of payments to be determined and “general visibility” into user patterns, Munshi told PYMNTS in an interview published in November 2021.
The company then advises users on how to pay off debt faster by increasing their minimum monthly requirement and how to improve their credit by keeping their debt at an acceptable credit utilization ratio, Munshi said at the time.
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