TransUnion Leads $30M Series B Funding for Blockchain Fintech Spring Labs

TransUnion Invests in Blockchain Data-Sharing Platform Spring Labs

TransUnion, a leading consumer credit reporting agency, has recently made a strategic investment in Spring Labs, a company developing a blockchain-based platform for secure data exchange.

Details of the Investment and Partnership

TechCrunch has revealed exclusive information regarding the investment amount and the collaborative nature of the relationship between the two firms.

The decision by TransUnion, a publicly traded company with a $20 billion market capitalization, to support and partner with the four-year-old Spring Labs is noteworthy.

Disrupting Traditional Credit Evaluation

Numerous fintech companies are emerging with the goal of transforming how individual creditworthiness is assessed. Spring Labs is among these innovators.

The startup leverages blockchain technology to establish a more extensive data network, enabling credit bureaus and other institutions to better evaluate the credit risk of individuals not traditionally included in conventional credit reporting systems.

Spring Labs is currently raising a $30 million Series B funding round, spearheaded by TransUnion – a major player in an industry Spring Labs aims to reshape.

Evolution of the Partnership

According to Spring Labs founder and CEO, Adam Jiwan, the recent partnership stemmed from discussions initiated a couple of years prior.

“A relationship with TransUnion held the potential to significantly accelerate our growth,” Jiwan stated. “Their desire to actively participate in our development led them to seek an equity stake.”

Financial Details and Future Growth

While the valuation for this Series B round remains undisclosed, as the round is still finalizing, Jiwan confirmed it represents a “significant increase” over the $23 million Series A raised in June 2019.

Existing investors, including GreatPoint Ventures and August Capital, are also participating in the current funding round.

A Better Approach to Information Exchange

Jiwan emphasized, “We’ve developed a superior method for exchanging sensitive data, alongside a suite of products and services designed to enhance identity verification, fraud prevention, and underwriting processes for lenders.”

Spring Labs intends to “revolutionize” the storage and sharing of consumer financial data through its network foundation, known as the Spring Protocol.

This exchange is designed to prioritize privacy, allowing competitors to collaborate for mutual benefit.

Leveraging TransUnion’s Resources

The partnership with TransUnion will provide Spring Labs with access to a larger sales force (expanding from four to 100) and contractual access to over 10,000 of TransUnion’s financial institution clients.

“They recognize opportunities to utilize our technology,” Jiwan explained. “They believe it can unlock siloed data and improve financial inclusion. We are exploring the creation of unique information-sharing networks.”

There is also growing interest in applying Spring Labs’ technology to connect the digital asset space with the regulated financial sector.

Board Appointments

As part of the investment, Steve Chaouki, president of U.S. Markets at TransUnion, will join the Spring Labs board of directors.

Brian Brooks, former head of the OCC and ex-Coinbase counsel, has also recently been appointed as the company’s first independent director.

TransUnion’s Strategic Rationale

Chaouki explained to TechCrunch that numerous factors drove the strategic partnership and investment in Spring Labs.

“The financial aspect is important, but the time we plan to dedicate to working with them is even more valuable,” he said. “This is a substantial move for us. We invest to collaboratively build with our partners.”

Real-World Applications and Scalability

Marko Ivanov, a TransUnion vice president, highlighted the company’s appreciation for the “real-life applications” demonstrated by Spring Labs.

“We aim to collaborate on scaling their existing networks and onboarding more clients, which is crucial for addressing fraud-related challenges,” he stated. “We are also excited about collaborating to develop new networks, leveraging their protocol to enable secure information sharing while protecting consumer privacy.”

Expanding Use Cases

TransUnion envisions numerous applications beyond fraud prevention, encompassing “any risk-related use case,” according to Ivanov.

Rather than independently developing the technology, TransUnion recognizes the benefit of investing in a company that has already established capabilities in areas where it has limited prior investment, as noted by Chaouki.

“We have more ideas than we have the capacity to implement,” he said. “Expanding capacity is challenging. Investing in companies like Spring Labs allows us to enter adjacent markets.”