Lendbuzz

/ Startups / By
Founders Dan Raviv & Amitay Kalmar from Lendbuzz’s website

Founders: Amitay Kalmar & Dan Raviv
Founding: 2015
Mission: Financial opportunity should be more personalized and fair
Employees: 270 & 34% Local
Workplace: Hybrid
Stage & Capital Raised: Series D & $200M raised
Investors: Goldman Sachs, Wellington Management, Group 1001, 83North, O.G. Venture Partners, Highsage Ventures and MUFG Innovation Partners
Key Customers: Ford, Nissan, Chevrolet & Toyota dealerships
Glassdoor Rating: 4.1
Valuation (estimated): $1.1B (reported in their Q2 ‘24 $45M Series D fundraise)
^ 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!

Lendbuzz is an AI-powered auto finance platform using technology to broaden access to credit. Their team helps “thin file” customers get fast, fair auto financing when they’re buying a vehicle to fill a gap in our financial system and allow car dealerships to close more business.

This late stage fintech startup was founded in 2015 by Amitay Kalmar & Dan Raviv. They were analyzing Lending Club loans and uncovered better ways to audit the creditworthiness of borrowers with incremental data & machine learning models. State of the art neural network algorithms allowed them to consider and understand consumers better as they collected more signals. Increases in computing power were opening up new possibilities.

For immigrants, young adults (including college grads), and some other members of our society, access to credit is a “chicken and egg” problem. A lack of credit history can prevent access to products and services to build a better life. Amitay & Dan encountered this very problem when they immigrated to the U.S.

I remember my brother proudly moving to NYC after college to start his first job as an aspiring investment banker. Except there was one little problem. He had no credit history to go to restaurants, watering holes, or even Broadway. He had to sign up for a “secured credit card”, putting $49 down with a $200 limit to build his credit over that first year.

If he were living basically anywhere else and had to buy a car to drive to his job, what were his options? A lack of credit history can be a major problem!

According to Experian, 60M+ Americans have thin credit files (src). That means they have fewer than 5 accounts on a credit report with the major credit bureaus (Experian, Equifax & TransUnion). Credit bureaus have been around since the 1800s. Equifax was founded in 1899, Transunion in 1968, and Experian in 1996. Technology has come a long way and so should the tools & criteria we use to evaluate borrower risk. 

Amitay & Dan’s goal was simple: use technology to better assess risk and help more people become car owners. Lendbuzz is using the power of data science and AI to redefine lending, beginning with auto financing. Better yet, they’ve partnered with car dealerships to create more sales opportunities and grow their bottom lines. That’s a win-win.

Today Lendbuzz provides auto loans to deserving borrowers, including those without a social security number, no credit history or thin credit. They offer fair rates and a chance to build your credit score with a loan that can be approved within 2 business days when purchasing a vehicle, working closely with dealerships to finalize the process.

Lendbuzz’s secret sauce is pulling in thousands of data points from various sources like bank records, education, employment, and spending patterns to evaluate an applicant’s creditworthiness with a proprietary risk score (src). 

Their technology first approach, focus on underserved markets, partnerships with auto dealerships, and balance sheet helps underscore their credibility and stability. Lendbuzz has begun to securitize their loan portfolio, completing a recent $219M AAA rated securitization, up from an A- rating in their first securitization three years ago. They have completed over $1.2B of asset backed securitizations and have still delivered growth in a challenging consumer credit cycle over the past 24 months (src).

In October 2023 Lendbuzz announced a $45M Series D financing with an additional $300M in a forward flow debt facility led by Group 1001 with participation from existing investors including, 83North, O.G. Venture Partners, and MUFG Innovation Partners.

Lendbuzz’s business continues to grow – registering ten consecutive profitable quarters (as of Q4 ‘23), 135% revenue growth in 2022, 80%+ growth in 1H 2023, and the team has exceeded a $200M annual revenue run-rate (src). They are actively hiring across functions in 2024 in Boston, Tel Aviv & throughout the U.S.

Operators to Know:

My investigative powers continue to need work so apologies to the Lendbuzz team I know I missed many up & coming operators internally

Key Roles To Be Hired (Locally):

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

  • What are the key growth initiatives for 2H 2024?
  • What are the biggest challenges as you scale the team to 300 employees?
  • What is the long term vision for the company? Which loan products will be rolled out next?
  • What are the most important datasets that contribute to proper loan portfolio forecasting?

We’re optimizing for readability here so to learn more about Lendbuzz you’ll have to D.Y.O.R. I’m excited to watch this team bring credit worthiness into the AI age. All borrowers applaud your efforts. See you around the winding Boston roads!

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