Updraft, a UK-based consumer lending fintech has announced the closing of a £250M forward flow arrangement with Jefferies and Santander Corporate and Investment Banking, allowing the business to build on its mission “to help UK households move away from expensive credit cards and overdrafts.”
The closing of the arrangement allows Updraft “to build on its momentum out of 2023 into 2024, helping customers on a path to debt zero with clear pay-off routes.”
Updraft’s growth plans will “see more value added features to turn users from borrowers to savers, test new channels to reach new customer segments while staying on course to be the leader in financial support and guidance.”
This latest fund-raising round “concludes a strong year for Updraft, which uses best in class risk models that outperform traditional bureau-based credit risk models by combining bureau data, open banking data and behavioral data to better underwrite credit risk and lower the cost of credit.”
The business has now grown “to 500,000 users and has successfully empowered individuals to take back control of their finances, by paying off more than £225m in credit cards and overdraft debt.”
Updraft CEO, Aseem Munshi, stated:
“This agreement helps us serve even more customers to manage their finances. The size and term of the deal gives us a long window to focus on building our products, processes and strategy for future growth while we continue to manage risks and build a profitable business. This is another key milestone delivered by the amazing Team Updraft.”
MD, Head of ABS Originations at Jefferies, Pradeep Krishnamurthy added:
“Our review of Updraft’s processes and underwriting gives us confidence in their ability to originate and manage a high performing loan book.”
Updraft was advised by Alantra “on the design and execution of the forward flow arrangement.”
Co-CEO of FIG at Alantra, Andrew Jenke said:
“We are immensely pleased to have advised Updraft on the execution of this important transaction.”
Alongside the Jefferies and Santander Corporate and Investment Banking deal, Quilam Capital has further reiterated its confidence in Updraft’s ability “to originate and manage their loan book leading the mezzanine capital increase to support the £200m on-balance sheet capacity.”
This was complemented with “some additional equity capital round led by MoreThan Capital and LC Nueva AIF.”
The influx of this capital sees Updraft “reach profitability in 2024 and invest in its platform business.”
As noted in the update, Updraft is a financial technology company that “provides loan refinancing solutions which enables its members to understand their financial profile, forge positive habits with their money, and make changes that pay off for the long term.”
Combining smart algorithms, Open Banking and credit reference data, Updraft helps build a full picture of “a user’s financial profile. It then serves bespoke recommendations to establish practical, beneficial habits and deliver routes to pay off borrowings in the most effective possible way.”