Texan FinTech StellarFi nets $15m to improve credit scores

Texan FinTech StellarFi nets $15m to improve credit scores

Texan FinTech company StellarFi, which helps users build credit scores by paying bills, has reportedly collected $15m in its Series A funding round.

Existing StellarFi investor Acrew Capital served as the lead investor, according to a report from TechCrunch. StellarFi did not reveal its new valuation, but the company’s founder Lamine Zarrad said it was a significant ‘up round’.

Commitments to the Series A also came from Trust Ventures, ATX Venture Partners, Dream Ventures, Interplay, Accomplice Ventures, Vera Equity, FJ Labs, Fiat Ventures, Gaingels, Kelmhurst, Oyster Funds, Hilltop Ventures, Permit Ventures, Kindergarten Ventures, J2 Capital, Socially Financed and Kapital Ventures.

Prior to its collapse, StellarFi was set to raise $5m in venture debt from Signature Bank for runway extension. The Texan FinTech company hopes to secure debt from another institution.

With the Series A capital, the FinTech company hopes to establish a marketplace that can link members to lenders.

StellarFi helps consumers automatically boost their credit score by paying bills. It does this by charging a subscription of either $4.99 or $9.99 to manage a member’s bills or recurring payments, such as rent. By consolidating the payments, it helps the customer track their payments and keep up with them. StellarFi then reports those on-time payments to credit bureaus, Experian, Equifax, TransUnion and Innovis.

It launched its platform in June 2022 and by the end of the year it had over $2m in annual recurring revenue – double its projections. Zarrad told TechCrunch that the company hit $1m ARR within just 134 days. He said, “I’ve built a unicorn before, but never seen this kind of growth.”

The Texan FinTech company is looking to build new features, as well as bolstering its mobile app.

Zarrad added that the company has seen zero defaults but has seen a lot of fraud. To protect the business, the company has built sophisticated algorithms to catch it upfront and quarantine attempted fraudsters.

Another FinTech company to focus on credit scores is Finexos. The company combines AI and open banking to measure a user’s financial capability without needing a credit score. It recently raised $695,000 in funding.

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