Lending, credit monitoring and financial planning app Updraft has scored a £16m equity and debt funding round.
The company is the brainchild of CEO Aseem Munshi, the former head of cards and unsecured lending for HSBC in the UK.
Updraft, which has launched onto the Apple App Store, aims to prevent consumers drifting into borrowing more and more each month without noticing. It estimates that consumers will pay over £10bn in fees and interests for overdraft and credit cards in 2020 alone.
The UK government’s Future Fund is providing equity in the form of convertible loan notes, while specialist investor Quilam Capital is leading on the debt side.
Using open banking and credit report data, Updraft aims to build a complete picture of a user’s spending and borrowing, and provides interventions designed to lift the consumer back into the black.
Where expensive borrowing is detected, users can get ‘Updraft Credit’ to pay off these high-interest-rate debts with a lower-cost loan, potentially saving them thousands of pounds in charges.
More than 40,000 people joined the waitlist for the FCA-approved service and 15,000 were granted early access to beta test Updraft throughout 2020.
The company says it has already refinanced millions of pounds of borrowings using its own balance sheet, and claims a typical Updraft member has been able to reduce their borrowing charges by up to 50%.
Quilam Capital director Sarah Watts said, “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.”
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