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UK fintech Updraft nets £272M in debt and equity to help users gain control of their finances

Updraft team
Picture credits: Updraft

Updraft, a UK-based consumer lending fintech company, closed a £272 million debt and equity round. The financing comprises a £250 million forward flow arrangement with Jefferies Financial Group and Santander Corporate and Investment Banking. Additionally, the company raised a further £22 million in Mezzanine and equity investment led by Quilam Capital, MoreThan Capital, LC Nueva AIF, and Auluk Investments.

The funds raised will be used to continue Updraft’s mission into 2024, focusing on helping customers achieve ‘debt zero’ with clear payoff routes. The company plans to add more value-added features, explore new channels for reaching different customer segments, and cement its position as a leader in financial support and guidance.

Helps customers manage their finances

Updraft was founded in 2017 by Aseem Munshi, who ran HSBC’s credit card business to address the inflexibility in the lending market with sky-high interest rates on credit cards and banks charging fees for early repayments on loans. The company aims to offer lower-cost credit options and provide tools that improve spending and savings habits. Updraft uses open banking to put customer credit data into a report that offers advice and lending options.

Its primary focus is to aid UK households in moving away from costly credit cards and overdrafts. The company achieves this through a unique blend of bureau data, open banking data, and behavioural analytics to underwrite credit risks more effectively. This innovative approach has significantly lowered the cost of credit for consumers.

Updraft witnessed a strong year, growing its user base to 500,000 and assisting individuals in paying off over £225 million in credit card and overdraft debts. Its advanced risk models have outperformed traditional bureau-based credit risk models.

Updraft CEO and co-founder Aseem Munshi expressed his enthusiasm for the deal. He said, “This agreement helps us serve even more customers to manage their finances. The size and term of the deal give 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.”

Pradeep Krishnamurthy, MD, Head of ABS Originations at Jefferies, also commented on the deal: “Our review of Updraft’s processes and underwriting gives us confidence in their ability to originate and manage a high-performing loan book.”

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