Austin, Texas-based fintech company Self Lender announced that it has raised $10 million in Series B funding led by Altos Ventures. Silverton Partners, Accion Venture Lab, and several others also participated in this round. This round of funding will be used for expanding its team, building new products, and increasing marketing initiatives.
The Center for Financial Services Innovation said that there are approximately 53 million people without credit or low credit in the US. And this funding validates Self Lender’s mission to help lay the foundation for the financial journey of its users.
Self Lender has more than 175,000 consumers on its platform and oversaw $140 million in CD-secured loan originations. As a result, the company saw quadruple growth in the past year by offering a way for consumers to build their credit.
“We are incredibly grateful for the commitment from Altos Ventures and our ongoing support from existing investors,” said Self Lender CEO James Garvey in a statement. “The cost of having poor credit in the U.S. is high and unfortunately hits those who are most vulnerable in our country the hardest. This backing will keep us steadfast in our goal of helping the millions of Americans with no credit score or poor credit history achieve financial stability and peace of mind.”
So far, Self Lender customers have seen an average increase of 45 points to their credit score. And new-to-credit users are reaching an average score of 670 starting from nothing.
How does it work? Self Lender’s customers receive a small credit builder loan that is held in a CD for safekeeping. Then customers repay the loan on a monthly schedule as the payments are reported to the credit bureaus. Once the obligation is paid off, the customer establishes a credit history and the CD unlocks with that customers’ money.
“We believe in the truly meaningful financial solutions Self Lender is offering to U.S. consumers and have been continually impressed with their core value proposition,” added Altos Ventures managing director Anthony Lee. “We have a shared vision in empowering people to take control of their financial lives so they can ultimately better control their own destinies. We’re looking forward to the continued success of Self Lender.”
