Private investor network Growth Capital Ventures has spearheaded a significant investment round into fintech firm Finexos.
The £695,000 injection will help Finexos' market entry strategy for its platform which provides a more accurate way of evaluating credit worthiness. It combines open banking with artificial intelligence and machine learning to measure financial capability without the need for a credit score.
Traditional credit scoring requires roughly 12 pieces of information whereas the Finexos platform uses more than 220 pieces of data to accurately assess how a person or business manages cashflow. The firm says there is a global requirement for financial inclusion by redefining credit scores.
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This is the latest Enterprise Investment Scheme (EIS) eligible investment opportunity led by Growth Capital Ventures, an FCA authorised investment firm specialising in impact driven co-investment opportunities across alternative asset classes. Norm Peterson, co-founder and CEO of the Newton Aycliffe-based outfit, said: "Over 12 million people in the UK alone are in the high-interest, revolving credit trap as a result of legacy credit scoring. Millions of people are paying to high interest rates due to a low legacy credit score – even though we now have access to the information to readily prove that such a low credit score can be entirely unjustified.
"With the Finexos solution developed and ready to take to the market, the platform is set to transform credit scoring, increasing loan originatation while simultaneously reducing default rates for lenders."
Finexos, based in Bromsgrove, Worcestershire, was established in 2018 and its team includes founder and head of product Mark Fisher and CEO Areiel Wolanow, an adviser on artificial intelligence and Blockchain to the UK Parliament, speaker on financial inclusion at the G20, and designer of the credit scoring engine for M-Pesa. The business also includes chief technology officer Kefirah Kang, who led the design and launch of platform for Hong Kong’s first licensed virtual bank WeLab (2019); and chairman and investor Steve Bone, who has led multiple corporate buyouts and successful exits.
Mark Fisher said: "Finexos can deliver high-impact outcomes for underserved consumers and SMEs and will increase loans originated, at a lower default rate, for providers of credit. Finexos combines advanced technologies, commercial acumen and a strong business and operating model to solve an important social and financial issue.
"We are moving at pace and seeing significant traction with customers, utilising technology to provide better outcomes for consumers and lenders that can, overtime, replace the outdated and inefficient way credit scoring works currently."
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