Online lending startup Amount raises $ 81 million in Goldman-led round
Amount, a Chicago-based tech startup that online lender Avant founded in February, has raised $ 81 million in Series C funding led by Goldman Sachs, bringing its funding for 2020 to $ 140 million. Existing investors August Capital, Invus Opportunities and Hanaco Ventures also participated in the final round, the company said on Wednesday.
Amount has also accumulated bank customers who use its technology to provide personal loans and point-of-sale loans. BBVA, HSBC and TD Bank are among them.
Jade Mandel, vice president of the investment banking division of Goldman Sachs, said Goldman was drawn to the amount specifically by the fraud detection technology built into its platform.
Avant’s fraud detection models have been refined with $ 7 billion in loan origination, Mandel noted. “The company has solidified a clear data advantage” by finding signs of fraud “that resonate with its customers,” she said.
The investment and adoption by banks of this technology reflects the industry’s growing enthusiasm for point-of-sale lending.
“Point-of-sale lending has grown tremendously alongside the rise of e-commerce and does not appear to be slowing down,” Mandel said. “One of the reasons we invest is that we expect banks to play a bigger role in this growing market over time. “
Adam Hughes, CEO of Amount, said his company’s technological strengths lie in the user interface, fraud prevention and self-service tools that Avant developed as it provided loans to consumers on a period of seven years.
“We realized there was a white label opportunity to bring banks to the consumer digital standards of 2020,” he said.
Amount’s technology can “effectively replace everything banks do in branch offices today for their consumers, as well as offer point-of-sale, buy now, pay later tools to compete with Affirms and Klarnas of the United States. world, and for banks to go and win new merchant partnerships, ”said Hughes.
For all of its lending partners, Amount handles the loan application and origination process, but uses the bank’s credit policy, unless the bank asks for Amount’s help in setting policies.
TD Bank uses Amount’s technology to automate personal loan origination on its website and app, at branches and over the phone. He also uses Amount’s point-of-sale loans on e-commerce sites. For example, on TD Bank’s NordicTrack merchant customer checkout page, there are a few treadmill financing options that go through the Amount platform.
HSBC uses Amount’s personal loan origination software on its website.
At BBVA USA, Amount’s technology is used to originate personal loans and to prevent fraud in personal loans, credit cards, deposit accounts and money market accounts.
Amount has developed a fraud score based on the loan applications it has analyzed over the years. It also integrates its fraud prevention analysis with 30 technology partners and specialized risk data.
Some focus on first party fraud, in which a real customer requests a loan with no intention to pay back. Others focus on third party fraud; for example, someone applying for a loan with a stolen identity. Another group of partners specialize in synthetic fraud, where scammers create a fake identity from real identity data from different sources. And some provide income and employment verification.
Hughes did not specify which companies Amount works with, but said that with more people making purchases through mobile devices “the risk of digital fraud is certainly increasing. “
“There are a lot of bad actors out there trying to profit from skyrocketing digital usage and adoption rates,” he said.