Koyo Raises $50M Series A to Expand 'Thin File' Loans

Koyo Secures $50 Million Series A Funding

Koyo, a financial technology company leveraging open banking, has successfully completed a Series A funding round totaling $50 million. This round combines both debt and equity financing.

Force Over Mass spearheaded the investment, with continued support from existing investors including Forward Partners, Frontline Ventures, and Seedcamp.

New and Existing Investors

Alongside Force Over Mass, the funding round welcomed new investors. These include Matt Robinson, the founder of GoCardless and co-founder of Nested, as well as several angel investors specializing in the banking and lending industries.

Koyo’s previous funding event occurred in 2019, when it raised $4.9 million.

Addressing a Growing Market Need

Increased debt accumulation among a significant portion of the population during the pandemic has created a demand for alternative lending solutions. Koyo is positioned to serve this demographic, often overlooked by traditional loan providers.

Open Banking as a Credit Assessment Tool

The company differentiates itself by utilizing Open Banking data – specifically, bank transaction history – to assess lending risk. This approach bypasses reliance on conventional credit agency scores.

Instead of focusing on past credit reports, Koyo analyzes customers’ current spending habits to determine creditworthiness.

Targeting Underserved Consumers

This methodology allows Koyo to offer more favorable interest rates and affordable borrowing options to individuals typically excluded from mainstream financial services.

These individuals are often categorized as “thin file” customers (those with limited or no credit history) or “near prime” customers.

The “near-prime” market in the U.K. is estimated to encompass 13 to 15 million people.

Statements from Leadership

Thomas Olszewski, founder of Koyo and formerly a Venture Capitalist at both Frontline Ventures in London and Cavalry Ventures in Berlin, released a statement regarding the funding.

Filip Coen, a partner at Force Over Mass, commented, “We invest in companies that integrate groundbreaking technology with robust business strategies, and Koyo excels in both areas.

He continued, “Koyo has established a strong operational base over the past 18 months, and we are enthusiastic about contributing to its continued growth.”