Charm Solutions, a Fintech startup with offices in San Francisco, Stockholm, and Wilmington, Delaware, has announced that it secured a $3.5M seed funding round led by BootstrapLabs.
Charm is “developing a trusted AI-powered SMB Credit Advisor service that leverages self-learning AI to help institutional lenders transform data into valuable insights to drive profitability and help SMBs make better business decisions.”
Charm informs and advises SMB entrepreneurs “about critical financing decisions, reducing the overall cost of capital, and accelerating access to liquidity to support their growth.”
Lenders benefit from Charm’s AI-driven risk modeling tools “for acquisition, underwriting and portfolio management.”
Jacob Malmborg, Charm Solutions CEO, said:.
“BootstrapLabs has been investing exclusively in AI-first startups longer than any other VC firm, and have proven to be a true value-add partner for us. We look forward to leveraging their expertise as we grow our self-learning AI technology to transform complex and disparate financial data into smart business insights that can increase accuracy and bring greater transparency to SMB credit lending.”
A majority of lenders still “use manual processes such as emails, PDFs, and spreadsheets to access borrower information, which can take more than a week to collect financial data.”
Many financial institutions “rely upon traditional credit scores to underwrite the SMBs, not leveraging the wealth of business data that is available.”
Charm’s AI underwriting models and benchmarking insights, “combined with its proprietary SMB Score™ technology, have been developed over the past 10 years.”
The platform is currently “being used by lending institutions to make decisions for loans faster, reduce processing cycle time, and understand which loans in their portfolio need review during this period of ongoing economic volatility.”
Nicolai Wadstrom, CEO & Founder of BootstrapLabs
“We are excited to lead Charm’s seed round. The company is driven by a team of serial entrepreneurs in the FinTech space, including founding team members from Corpia, Lending Club and others. They bring a wealth of knowledge in machine learning, data science, business & consumer lending and technology, and are in great position to empower small and medium sized business owners to more efficiently operate their businesses, similar to how Credit Karma has helped consumers improve their credit scores and lower their cost of lending.”
A recently announced partnership with Abrigo, a technology provider of compliance, credit risk, lending and asset/liability management solutions finance backed by Accel-KKR and Carlyle, “will make CHARM Solutions available to lending institutions via their SageWorks platform.”
The engine “leverages self-learning AI to continuously monitor a wide range of current and historical data, loan performance, and accounting from more than 1,200 institutions.”
Charm Solutions embedded finance platform “produces risk models for acquisition, portfolio monitoring, SMB insights and benchmarking without the significant costs of the data scientists, IT infrastructure or the actual loan performance data.”
It also “provides fully transparent and explainable model output for underwriting decisions. With a robust score, trained on a large population of businesses from multiple industries and geographies helping to remove biases.”
Today, entrepreneurs “can sign-up at [mysmbscore.com] to receive their SMB Score within minutes, discover useful industry benchmarking information, and have CHARM’s SMB Credit Advisor recommend and submit optimal financing options from over $5Bn in potential SMB funding through the company’s marketplace.”
