Credit Kudos lands £5m Series A ahead of FCA’s credit market study
Credit Kudos, a London-based fintech using open banking to calculate users’ credit scores, has landed £5 million in Series A funding.
The investment comes ahead of the Financial Conduct Authority’s (FCA) Credit Information Market Study, which is intended to help boost competition in the UK’s credit assessment sector.
The capital raise was led by AlbionVC, with participation from fresh backers TriplePoint and Plug & Play Ventures, as well as from existing backers Entrepreneur First and Ascension Ventures.
Credit Kudos co-founders Matt Schofield and Freddy Kelly
A handful of angel investors also joined the round, including LendInvest’s co-founder Christian Faes and DST Global’s managing partner Tom Stafford.
As part of the investment, AlbionVC’s partner Ed Lascelles will join Credit Kudos’ board alongside its co-founders Freddy Kelly and Matt Schofield.
The start-up says it will use the fresh capital for new product development, market expansion and growing its headcount.
Founded in 2015, Credit Kudos pulls together financial data using open banking to help users get better, broader access to accurate credit assessments.
Connected to lenders across the UK, Credit Kudos says it also helps lenders to make quicker credit decisions, reduce their defaults and increase business by not turning away those who, without open banking data, would have ‘credit thin’ files.
Read more: Credit Kudos works hard for a £2.2m funding round
Last year, the fintech added more than 50 new lenders to its list, and this year it has become a partner of credit intermediaries such as ClearScore and CarFinance 247, to deliver open banking data to inform decisions on unsecured loans, car finance and mortgages.
“We believe open banking will soon be the standard for credit assessments,” says the fintech’s co-founder Kelly.
“With the FCA’s Credit Information Market Study on the horizon, the timing of this funding means we are now in an even stronger position to provide a real challenge to the incumbent credit reference agencies.”
The UK financial regulator launched the study last June off the back of concerns over “the coverage and quality of credit information, the effectiveness of competition between credit reference agencies, and the extent of consumer engagement”.
The FCA said it will report on its “preliminary conclusions” regarding these issues sometime this Spring.
In AlbionVC’s opinion, the credit assessment sectors has been “crying out for change”. “We are extremely impressed by the meteoric rise of Credit Kudos,” says AlbionVC’s Lascelles.
“We look forward to supporting them as they continue to transform the fortunes of millions of people previously financially excluded by the outdated, traditional credit assessment model.”
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