AvantCredit, a Chicago-based online consumer lender, has raised $75 million in a series c funding round led by Tiger Global Management and secured a $200 million credit facility.
Founded in late 2012, AvantCredit lends its own capital to "midprime" Americans with credit scores in the 600 to 700 range, using algorithms and machine-learning capabilities to make decisions on loans of between $1000 and $20,000.
The firm says that since its last funding round, which raised $20 million in August 2013, it has seen its quarterly loan volume increase by more than 500%, enabling it to grow from 70 to more than 300 employees.
The $200 million credit facility, led by Victory Park Capital, will help it ramp up lending while the new funding will be used to hire more developers and data scientists to enhance automation and expand the product offering.
Once this is done, claims AvantCredit, the verification processes will become fully automated - minimising loan default risk to reduce the overall cost of borrowing for its customers. Currently, annual interest rates are steep, averaging 36%.
Al Goldstein, CEO, AvantCredit, says: "This additional infusion of capital validates the success of our business model and will enable us to continue to innovate and enhance our technology - and attract the best and brightest data engineers in tech today."