20 July 2018
Visit www.gemalto.com

'Social network for credit' Vouch raises $6 million

15 May 2015  |  8063 views  |  1 Team meeting with smart phone

Vouch, a US-based startup that advances credit to customers on the basis of their social connections, has raised $6 million in Series A funding.

The company, which was started by former PayPal and Prosper alumni, uses a predictive model for loan underwriting based on trust, whereby prospective borrowers leverage their personal network of friends and family to act as loan sponsors. People sponsor a borrower by choosing an amount of money and agreeing to pay back that amount if the borrower defaults on their loan.

Sponsorships are used alongside standard financial data to gain a more complete picture of creditworthiness, which can help the borrower get a larger loan, lower their interest rate, or both.

Yee Lee, formerly of PayPal and now CEO of Vouch, says: “We are taking advantage of the unprecedented level of digital connectedness exhibited by modern borrowers to accomplish what the banking industry has never before been able to do at scale: incorporate a borrower’s social network into credit decisions.”

The latest round of financing comes on the heels of the company’s official launch in April 2015 and brings the total amount raised to $9.6M. Investors this time round include Core Innovation Capital, Data Collective, Stanford StartX Fund and Cooley joining existing sponsors, First Round Capital, Greylock, IDG Ventures and AngelList.

“It’s rare to come across an idea so simple, yet so transformative that it has the potential to fundamentally change a key pillar of the financial system - and that’s exactly what Vouch is doing,” says Arjan Schütte, founder and managing partner of Core Innovation Capital. “By uncovering a borrower’s true creditworthiness and helping them improve it over time with the help of the people who know them best, Vouch has an opportunity to revalue an entire asset class, putting extra money in consumers’ pocket and helping grow the economy.”

Comments: (1)

A Finextra member
A Finextra member 18 May, 2015, 09:26

Interesting development of social media data to supplement thin/poor credit bureaux data. I spoke about this development @Credit Summit earlier in the year. Its a natural development to build out social media information, and perhaps even add utility data to make loan underwriting move relevant for todays population.

After all, as in life, you are defined by the company that you keep..

Average teen/twenty something probably invest 1000% more time in their social media profile than financial profiles. Over here in the UK, I havent heard Experian/Equifax/Call Credit talking about how they plan to leverage social media data and not let the start ups disintermediate them??

Be the first to give this comment the thumbs up 0 thumb ups!
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Lenddo delves into credit card applicants' social media data

Lenddo delves into credit card applicants' social media data

28 April 2014  |  8418 views  |  1 comments | 11 tweets | 12 linkedin

Related blogs

Create a blog about this story (membership required)
Visit info.nice.comVisit https://secure.vasco.comVisit iliad-solutions.com/

Top topics

Most viewed Most shared
Calmejane quits Lloyds Bank to join SocGenCalmejane quits Lloyds Bank to join SocGen
12637 views comments | 6 tweets | 7 linkedin
Hong Kong plans September go-live for blockchain-based trade financeHong Kong plans September go-live for bloc...
10051 views comments | 9 tweets | 17 linkedin
Mastercard enlists Worldpay to push Vocalink's Pay by Bank appMastercard enlists Worldpay to push Vocali...
9625 views 19 comments | 15 tweets | 30 linkedin
IBM to test dollar-pegged 'stablecoin'IBM to test dollar-pegged 'stablecoin'
6549 views comments | 4 tweets | 14 linkedin
Bringing about new systems and faster payments globallyBringing about new systems and faster paym...
6377 views comments | 2 tweets | 7 linkedin

Featured job

Find your next job