AI-powered credit technology firm Abound has secured up to £250 million in new financing from Deutsche Bank, further cementing its position as a leader in AI-driven consumer lending.
This investment will enable Abound to scale its operations and enhance its proprietary underwriting platform, Render, which leverages AI and Open Banking data to provide a more accurate and individualized assessment of borrower affordability.
With this latest funding, Abound’s total funding potential has reached £1.3 billion, making it one of the most well-funded fintechs in Europe. The company’s AI-powered lending approach has demonstrated significant success, reducing default rates by 75% compared to industry standards and allowing for lower interest rates on loans ranging from £1,000 to £20,000.
Let’s break this down step-by-step, what it means, why it matters, and where it’s all heading.
Abound, a London fintech started back in 2020, has been quietly revolutionizing lending. They’re using AI to peek into your bank account (with permission, of course!) via Open Banking, figuring out what you can actually afford to borrow. The goal? Lower rates, fewer defaults, and loans that don’t leave people drowning in debt.
This £250 million joins forces with money Abound already has from big players like Citi, Waterfall Asset Management, and LuminArx. Add in a previous £800 million round from May 2024, and their total lending muscle could hit £1.6 billion, according to UKTN. That’s a lot of loans—and a lot of potential to change lives.
Traditional lending, like what your bank or credit card company does, relies on credit scores.
Those scores are like a financial report card based on your past, but they don’t always tell the full story. Maybe you had a rough patch years ago, or you’re new to credit, either way, you might get stuck with sky-high interest rates or no loan at all.
Abound’s founders, Dr. Michelle He and Gerald Chappell, saw this problem and said, “We can do better.”
Their secret weapon is a platform called Render. It’s AI-powered and uses Open Banking, a system where you let companies see your bank transactions—to get a real-time snapshot of your finances. Are you earning steady cash? Do you splurge or save?
Render crunches the numbers and figures out what loan you can handle. Abound claims this cuts defaults—the times people can’t pay back, by 75% compared to the industry norm. That’s huge! Fewer defaults mean they can offer loans with rates as low as 8.0% APR, way below the 30% or more you might see elsewhere.
Gerald Chappell, Abound’s CEO, put it plainly: “This new facility from Deutsche Bank further evidences the power of our bank-transaction data-led AI credit decisioning technology.” He’s excited because Open Banking is now used by nearly 20 million Brits, and it’s catching on worldwide. Translation? Abound’s got a blueprint that could go global.
Dr. Michelle He, the COO, is a computer science whiz with a PhD. She used to work at EY, helping banks figure out lending analytics and stay on the right side of regulators. Her personal story, she once struggled to get fair credit herself, fuels Abound’s mission.
Then there’s Gerald Chappell, the CEO, who ran digital lending at McKinsey & Company. Together, they’ve built a company that’s not just growing fast but also pushing boundaries.
Dr. He chimed in too: “Abound’s diversified funding strategy ensures resilience in the evolving credit market, as we continue to expand.” She’s hinting at a bigger play, sharing their tech with other lenders. Imagine if banks everywhere started using Render. That’s the dream.
Abound’s already loaned out over £650 million since starting, per BusinessCloud. They hit profitability three years in, which is lightning-fast for a startup. Loans range from £1,000 to £20,000, with terms up to eight years and rates between 8.0% and 29.8%.
Compare that to the average personal loan rate in the UK, around 10-15% for good credit, but much higher if your score’s shaky, and Abound’s offering looks tempting.
Research backs this up. A 2023 report from the Financial Conduct Authority (FCA) found over 15 million UK adults have trouble accessing affordable credit. That’s where Abound steps in, targeting folks who’ve been ignored or overcharged. Plus, they’re regulated by the FCA and part of Cifas, an anti-fraud group, so they’re playing by the rules.
Abound isn’t alone in this game. Other UK fintechs like Lendable and Zopa are also using AI to shake things up. Lendable snagged £210 million recently, pushing its valuation to £3.5 billion, while Zopa raised £68 million to launch a current account and boost its AI tech, says TechFundingNews.
These companies are all racing to make lending smarter, but Abound’s 75% default drop gives it bragging rights, for now.
With this £250 million, Abound’s planning to grow big. They want to double their team from 65 to 130, scale up in the UK, and take Render worldwide. Open Banking’s spreading, countries like Australia and Canada are jumping on board, so Abound’s timing looks spot-on.
They’re also eyeing “prime lending” (loans for people with solid finances) and even licensing Render to other lenders.But it’s not all smooth sailing. More competition means they’ll need to keep innovating.
And regulators? They’re watching closely to ensure AI doesn’t accidentally discriminate or mess up. Still, the potential’s massive. If Abound pulls this off, they could make borrowing fairer not just in the UK, but everywhere.
Millions of people get crushed by high-interest debt because lenders don’t see the real them. Abound’s betting that AI and data can flip that script, lower rates, fewer defaults, more access. Add in their social angle, they donate to Spread a Smile, a kids’ charity, with every loan, and it’s a feel-good story too.
What do you think, could this change how you borrow?
Let’s keep an eye on it!
