Abound, a personal lending FinTech that uses artificial intelligence and open banking to provide more accurate and affordable loans, has raised more than £500m in funding to turbocharge its growth in the UK market.

Founded in 2020 by two senior credit experts, Abound has created a way to offer borrowers better interest rates by looking at their complete financial picture, through open banking and AI, rather than relying on just a credit score.

By doing so, Abound is also able to confidently lend to many borrowers who have been ignored by traditional banks while reducing the risk of doing so. To date, Abound has been growing 30 per cent month-on-month and served over 150,000 customers through its service.

This latest investment brings the total raised to date by Abound up to £570m. The new funding will be used to expand the number of customers it lends to, as well as significantly grow Abound’s headcount.

Funding will also be used to develop its business-to-business offer, allowing other banks and lenders to take advantage of its technology. Abound is on track to have £1bn on its balance sheet by 2025.

The new funding round comprises both debt and equity financing. Debt financing came from Citi, the American multinational investment bank, and clients of Waterfall Asset Management, a global alternative investment manager.

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Equity investors included K3 Ventures, GSR Ventures, and Hambro Perks – who led the previous equity round for Abound. For the round, Abound was advised by leading international law firm Osborne Clarke LLP.

It is estimated that over 15 million people in the UK currently struggle to borrow for unexpected costs, with many with poor credit scores having to accept unacceptably high or unrealistic interest rates.

Through its unique service that can instantly ‘x-ray’ people’s finances, Abound continues to offer better rates than major lenders and has found customers miss repayments 75 per cent less than the industry standard.

Gerald Chappell, CEO and co-founder of Abound, said: “Our approach to lending remains unique in the finance industry and this latest investment, which comes from a mixture of tech multinationals to global banks, is a testament to the demand and success of our service, particularly in this current challenging economic landscape.

“Abound has gone from strength to strength since we first launched and we’re excited for the next stage of growth as we look to capitalise on the strong foundations we’ve embedded with customers, and to revolutionise lending forever.”

Krishin Uttamchandani, director at Waterfall Asset Management, said: “Waterfall is pleased to be part of Abound’s business expansion as it seeks to utilize open banking in a more informed way to help the consumer.

“Abound is led by a strong management team that we are excited to work with, supported by, what we believe is, a robust tech stack, underwriting methodology and view on risk.

“What Abound has achieved in its first two years of lending has been very impressive and should lay the groundwork for a strong platform to better serve the customers who should be able to access cheaper credit with open banking. We are excited to be a partner in the Abound journey.”

Kuok Meng Xiong, CEO of K3 Ventures, said: “We are thrilled to be investing in Abound’s parent company Fintern as it propels itself to new heights with the latest capital raise. The lending industry is dominated by old practices, like traditional credit scoring, which ignore technological developments of the last decade. Abound is delivering a unique product and a differentiated approach which is already proving itself to work for thousands of customers. We are excited to see Abound’s offer grow in the years ahead.”

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Tom Bradley, partner at Hambro Perks, said: “We are delighted to have been the first institutional investor in Abound and we are very pleased to follow-on to help take the business to the next level.”