DealmakingFintech

Bloom Credit raises $13 million to help fintechs automate access to credit data

Investors include founders of Acorns and Marqeta

Bloom Credit , an API platform company that helps businesses integrate with credit bureaus, announced Thursday it has raised $13 million in Series A funding.

Allegis NL led the second tranche of the round, which also included participation from Resolute Ventures, Slow Ventures, and Commerce Ventures. The financing also included a previously unannounced $3 million from angel investors including founders of a number of large fintechs: Better Tomorrow Ventures’ Sheel Mohnot and Jake Gibson, Acorns co-founder Jeff Cruttenden, Marqeta founder Jason Gardner, vice chair of Personal Capital Mark Goines, and former Prosper President Ron Suber. 

Bloom Credit provides credit bureau and score related products through a single, “easy-to-use” API, which integrates with all three credit bureaus to give businesses unified access to request or submit credit bureau data. The company claims to be “helping grow a new class of credit products and services in a fraction of the time it has traditionally taken.”

Bloom Credit initially started out in 2016 as a consumer product to help consumers that were declined for loans get approved for the loans.

“But we realized the existing infrastructure at play for a lot of financial services products around credit was really built to service a lot of the major banks and the large incumbent technology players,” Bloom Credit co-founder and CEO Matt Harris told FinLedger. “And despite a lot of the willingness for a bureau to actually go and enter other markets, what they found is that it’s really difficult for them to do. So we set out to build a new product and become the Twilio, or Plaid, for credit.”

The company launched the actual API in November of 2019 with the goal of giving developers unified access to request or submit credit bureau data.

“It took years for Apple and Chime to launch their credit products, and very few companies can afford the time and money needed to set up all parts of a lending program,” Harris said. “We’ve built the pipes to help customers that are trying to build a new credit card company, or create new credit products by giving them access to all of these different credit bureau infrastructure tools.”

Bloom Credit currently has 10 clients, including direct-to-consumer startup TrueAccord, which said it took a few weeks after it began working with the company to be able to provide its consumers access to credit reports and launch new products. Bloom also works with a mortgage data processor and helps another company speed up rental applications. It’s currently “powering the financial experience for the thousands of consumers,” Harris said.

The company’s target customers include the classic fintech such as neobanks. It also can provide fintech enablement, such as helping a business set up Affirm for split-pay functionality.

“We’re different from anything else out there,” Harris told FinLedger. “Bureaus have been very selective with how they have chosen their partners.”

One year ago, Bloom Credit had seven employees. Today, it has 16. With the new funding, Harris said the company expects to more than double its headcount to between 35 and 40 by the end of the first quarter.

It also  plans to use its new capital to invest in more products.

Investor POV

Dan Rosen, founding partner of Commerce Ventures – an early investor in Marqeta and MX – said that Bloom Credit is essentially “unlocking access” to the credit bureau ecosystem.

“The financial infrastructure market has enabled the explosive growth of neobanks and other advances in deposit-related personal finance,”he said.

Bloom Credit, he believes, “can enable developers to build the next wave of fintech innovation by fostering better, fairer access to credit.”

Investor Mark Goines said the approach that Bloom Credit has taken to help fintechs and related companies automate access to credit data in a rapidly deployable matter represents “the convergence of many trends” he’s seen.

“The burden of credit has been very challenging for most companies to do effectively, because the bureaus are large and old, and have methodologies that can be very difficult for startups to deploy,” he told FinLedger. “I think there’s going to be a general trend around financial technologies where we see APIs really help early-stage companies and even later stage companies scale more efficiently and more rapidly. APIs for access to credit data is a huge idea. It seems simple, but I believe it’s going to scale rapidly.”

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