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A £3.5bn British fintech backed by Goldman Sachs is plotting a major US expansion after doubling profits last year by providing more new personal loans than any other UK bank.
Lendable, which uses artificial intelligence technology to automate credit checks, increased profits by 120 per cent to £11mn while revenues rose by 90 per cent to £446mn last year.
Last year, the group issued more new consumer credit loans by volume than any other lender in the UK, and the second-largest number of new credit cards, outstripping banks with trillion-pound balance sheets, according to Experian data. The Post Office and Asda, the supermarket chain, provide loans through Lendable.
Martin Kissinger, co-founder of Lendable, said: “There are millions of people who use credit and most of that is done by big banks, and they do not do as good of a job as can be done. So we set out to build a tech company that would do it better.”
Lendable does not take deposits and instead originates and services the loans on behalf of institutional investors but does not hold them on its balance sheet. Investors receive the interest payments while Lendable charges a fee to use the platform.
Since its founding in 2014, Lendable has received the backing of the early Revolut investor Balderton, Goldman Sachs and venture capital firm Passion Capital. Its last funding round in 2022, which was led by the Ontario Teachers’ Pension Plan and raised £210mn, valued the business at £3.5bn. The company has not raised money since and it declined to comment on a current valuation. However, the fintech sector has generally seen valuations decline markedly as interest rates have risen.
Lendable first became profitable after three years, far quicker than peers in the sector.
Kissinger said Lendable’s machine-learning technology drew on a large pool of data, which allowed it to assess risk differently to traditional lenders and therefore provide more competitive terms to a wider group of customers.
“We can provide loans to people who are actually low risk, even if that is not to other [banks and providers].” Lendable provides most of its loans to prime as well as “near prime” customers, who are often rejected for loans by traditional banks.
Kissinger cited his own example in his twenties — when he moved addresses frequently and did not have a solid history of paid utility bills — as an example of this demographic.
The company offers interest rates of between 5.8 per cent and 48.9 per cent for loans of up to £35,000 over a term of up to eight years.
Lendable will plough its profits into rapidly bulking up its small US operation, which was first established in 2021, and into launching in Mexico.
Other UK fintechs are also hoping to tap into American consumers while their growth on home turf slows. Revolut, Britain’s most valuable fintech, applied for a US banking licence in March to accelerate growth, but Kissinger reckons that consumer credit products such as Lendable will fare better.
“A neobank proposition that works in the UK doesn’t translate as neatly to the US whereas personal loans and credit cards are directly recognisable, people look for them in similar channels,” he said. “It’s a much more natural expansion for us than for many other fintech products out there.”
