Fintech Startup Lendbuzz Raises $45 Million in Equity and $300 Million in Debt, Valued at $1.1 Billion

In a remarkable display of resilience amid ongoing high-tech market uncertainty, Lendbuzz, a fintech startup specializing in artificial intelligence-based consumer loans, announced today that it has successfully completed a capital raising round totaling $45 million. The funding round also included an additional $300 million in debt financing, marking a significant milestone for the company.

The funding was spearheaded by Group 1001, a prominent American financial services company with assets worth tens of billions of dollars. Lendbuzz's latest fundraising effort included a secondary component, allowing existing shareholders to participate, and catapulted the company into the coveted "unicorn" territory, with a valuation now standing at an impressive $1.1 billion.

Among the notable participants in this capital raising round were O.G. Venture Partners, Israeli fund 83North, and MUFG Innovation Partners, collectively demonstrating strong investor confidence in Lendbuzz's innovative approach to consumer lending.

Lendbuzz, founded in 2015 by CEO Amitai Kalmar and VP of Technology Dr. Dan Raviv, is headquartered in Boston, Massachusetts. The company has gained recognition for its pioneering AI-based lending system, which primarily focuses on providing consumer loans for automobile purchases.

In the United States, consumer credit traditionally relies heavily on credit scores. However, Lendbuzz's approach aims to address the limitations of conventional credit rating systems, which often exclude individuals with limited credit histories. CEO Amitai Kalmar stated, "The credit rating systems are relatively outdated, unsophisticated, and in fact leave tens of millions of people out of the system—especially those who do not have a long credit history."

Lendbuzz's innovative model leverages alternative data sources to assess a customer's creditworthiness. This approach compiles a comprehensive financial profile by considering various factors, including education, employment stability, the type of vehicle being purchased, and its suitability relative to the customer's income level and occupation. To create this holistic profile, Lendbuzz integrates data from approximately 30 third-party systems, ultimately collecting several hundred to several thousand data points on each consumer.

With approximately 300 employees, including a growing development center established in Israel two years ago, Lendbuzz is poised to continue its expansion efforts in 2023. The company's unique approach to consumer lending has positioned it as a frontrunner in the fintech sector, attracting significant interest from investors and enabling it to thrive even in the face of market uncertainty.