EnFi

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Founders: Joshua Summers & Scott Weller
Founding: 2023
Mission: Accelerate Complex Credit Analysis and Risk Monitoring
Employees: 10 & 100% Local
Workplace: Waltham, MA + Remote
Stage & Capital Raised: Seed & $7.5M raised
Investors: Unusual Ventures, Boston Seed, Argon Ventures, Impellent Ventures
Key Customers: Beta customers include institutional and private lenders – details coming soon!
Glassdoor Rating: N/A
Valuation (estimated): <$100M
^ this is a useless number from MGMT Boston. There is no tangible valuation until the business is sold or goes public. Don’t forget it!

EnFi is building an agentic, native AI software platform for financial institutions. Their technology will give lenders the power of 10,000 analysts so they can better analyze what is going on with the complex credit in their active loan portfolios and source & underwrite these instruments better over time.

Founders Joshua Summers and Scott Weller are long-time Boston serial entrepreneurs who started writing some angel checks together at Boston based TBD Angels after selling their respective companies. Joshua has solved big data type problems for the past 25 years in and around media & ad tech. His most recent company was clypd which was acquired by AT&T in 2019. Scott was most recently the Co-founder & CTO of SessionM which was acquired by Mastercard. And they’re both gluttons for early stage punishment!

In the spring of 2023, the sudden banking crisis brought on by surging interest rates led to the collapse of SVB & First Republic. There were a lot of frantic phone calls from portfolio companies and it got the duo thinking. It’s really hard to understand the underlying complex debt on some of these balance sheets. For institutions, customers, partners, and investors alike.

When some companies went to move their bank balances, there were restrictive covenants (i.e. terms) on the loan documents which limited where they could put that capital. Those terms obviously help limit risk exposure to lenders. But understanding covenants buried inside hundreds of pages of loan documents a bit more clearly and how they fit into an overall risk framework seemed like a problem. And an opportunity.

Josh & Scott talked to four dozen different institutional and private lenders to help paint a picture of the manual processes built up over decades to determine the workflows & risks associated with lending. They developed an initial understanding of the risks across the lifecycle of mezzanine lending, asset based lending, syndicate loans, and more. These complex credit categories, difficult commercial loans that are hard to underwrite and come with hundreds of documents & materials, are not as well understood as the mortgage or auto loan categories. 

The commercial loan market in the U.S. is almost $3T with a T! (src) That is a lot of debt, a lot of covenants, and largely monitored by thousands of risk analysts using legacy tooling. J.P. Morgan’s global loan portfolio alone exceeds $1T (src) and they have more than 300,000 employees (src).

EnFi is building a platform to harness the power of 10,000 analysts using the latest AI technologies to match entities, analyze documents, and generate insights across loan portfolios. They are tackling the three phases of lending – origination, underwriting and portfolio management – to provide a better, AI powered digital experience for risk analysts and portfolio managers.

Portfolio management is the first “house on fire” problem for institutions who need to better understand the status of their outstanding loan portfolios. These portfolios are covered by a limited number of humans on staff who are responsible for monitoring if their customers are in compliance at any given time.

EnFi’s initial portfolio management offering is in live beta with paying customers and they’re building the remaining 80-90% of their platform to track toward their vision of providing a holistic platform around origination, underwriting, and portfolio management. 

These initial customers – a mix of institutional and private lenders – are helping the team contribute to a better understanding of customer problems by allowing EnFi to test, learn, iterate, design, and prioritize the most important features through customer led development. 

The team’s initial goal is growing their supported loans on platform, capturing broader swaths of an institution’s loan portfolio over time. Many of their initial customers are in the process of migrating their entire loan portfolio to be supported by EnFi.

In the near future they plan to help their customers with underwriting, pre-qualifying deals using LLMs & proprietary knowledge graphs, so analysts can save time in the origination stage and leverage better automated testing to gauge fitness before a deal reaches a human. This will drive a lot of efficiencies and better resource allocation to banking bottom lines.

There are even opportunities to help borrowers so they can have a better experience understanding when they are in a good enough position to be approved to take on debt, Or, help them realize when they’ve engaged in certain activities that might cause them to fall outside of compliance.

EnFi will be experimenting with their pricing model between SaaS, usage or token based, or potentially even outcome based pricing to build a revenue model that truly scales for their customers. In the near term they are a Founder led sales organization while they work quickly to figure out the best GTM model that works for their startup.

In the coming months and quarters they will be bringing on strategic hires, particularly in Engineering, looking for individuals who have been in AI “pre-ChatGPT” and know how to develop enterprise level tools & systems. EnFi leveraged their deep operating experience and relationships to raise capital from top investors like Unusual Ventures, Boston Seed, Argon Ventures, and Impellent Ventures to develop the first version of their platform and rapidly increase their loans under platform management. 

Operators to Know:

My investigative powers continue to need work so apologies to the EnFi team if I missed any up & coming operators internally

Key Roles To Be Hired:

If I were interviewing here are some questions I’d ask:

  • What are the key indicators of PMF (product market fit) the EnFi team will be tracking closely in the coming quarters? 
  • What are the biggest challenges as you scale the team?
  • What is the long term vision for the company?
  • What are the most important milestones you’ll be looking to reach by the end of 2024?

We’re optimizing for readability here so to learn more about EnFi you’ll have to D.Y.O.R. I’m excited to watch this team bring more lenders into the AI age. All consumers, investors, and analysts applaud your efforts. See you around town!

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