Updraft, described as an app that is part lending, part credit report, and part financial planning, has raised £16 million in funding. The new capital is in the form of both equity and debt. Updraft did not disclose the split between the two.
Quilam Capital lead on the debt side, and the UK Government’s Future Fund participating via their convertible loan note alongside a group of high-net-worth investors. In addition to the support of Quilam Capital, Updraft has enlisted a board of advisors that includes Mat Braddy, Brand Founder of Just Eat plc, Philip George, founder of Shawbrook Bank and Sanjiv Sud, ex Head Retail Bank HSBC India, and Global exec at HSBC.
Updraft was founded by former HSBC executive Aseem Munshi, who realized there was a problem with consumers who drift into borrowing more and more each month without noticing. It is estimated that consumers will pay over £10 billion in fees and interests for overdraft and credit cards in 2020 alone. Munshi said they are thrilled by this vote of confidence from a respected institution like Quilam. “This funding gives us the fire power to take on the UK’s spiralling consumer borrowing,” said Munshi.
While the online lending sector of Fintech may be crowded, Updraft believes it is taking a unique approach by building a “360-degree picture” of a users spending and borrowing patterns designed to coach the user to a path of fiscal responsibility. Simultaneously, Updraft users may use the app’s credit product to pay off high interest rate charges from credit cards or BNPL services.
Updraft reports that it has generated some initial success as more than 40,000 have joined a waitlist and 15,000 have been approved for early access under the beta test. The company says they’ve already refinanced millions of pounds of borrowings using their own balance sheet and a typical Updraft member has been able to reduce their borrowing charges by up to 50%.
Quilam Capital Director Sarah Watts issued the following statement:
“Over the years we’ve seen innovators making use of open banking, shed light on financial health and provide credit, however Updraft provides a truly unique offering across all of these aspects with a market leading solution to give customers the fairly priced credit they deserve. We’re delighted to invest in Updraft and support the business on their mission to give consumers the tools to save and reach their life goals faster.”
Updraft is available now on iPhone via the Apple App Store, with the Android version expected soon.