SAN FRANCISCO--(BUSINESS WIRE)--Vouch, the first social network for credit, today announced $6M in Series A funding to pioneer an entirely new model for consumer lending that measures social trust to make better lending decisions. In this round: Core Innovation Capital, Data Collective, Stanford StartX Fund and Cooley LLP join existing investors, First Round Capital, Greylock, IDG Ventures and AngelList. This latest funding brings the total amount raised by the company to $9.6M. The new financing will be used to accelerate growth of the Vouch network, helping members proactively build their creditworthiness to get better rates on loans, larger loans, or both.
“Vouch is creating the platform and analytical tools to usher in a new era of lending,” said Yee Lee, CEO of Vouch. “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.”
Led by a team of PayPal alumni and former banking executives, Vouch is on a mission to help the lending industry make better decisions in the digital age. To surface a more accurate representation of a borrower’s creditworthiness, Vouch has built an increasingly refined and accurate predictive model for loan underwriting based on trust. Similar to one of the most effective lending models of decades past – community banking – Vouch’s model looks beyond the individual and analyzes the rich set of data living within the community surrounding the borrower.
In addition to pioneering a new method for borrower evaluation, the company is also helping borrowers lower the cost of loans and increase access to financial power by enabling proactive and collaborative credit enhancement. The Vouch network allows consumers to pool and share their creditworthiness, enabling any member of the network to get the best possible rates on loans and other financial services.
“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,” said 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.”
This financing comes on the heels of the company’s official launch in April 2015. Consumers can start building their credit network with Vouch today by visiting https://vouch.com or downloading the Vouch mobile app for iOS and Android. Prospective borrowers can then apply for loans and ask friends, family and other personal connections to sponsor them. People sponsor a borrower by choosing an amount of money and agreeing to pay back that amount if the borrower defaults on their loan. Sponsors only pay Vouch if the borrower does not. 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.
Vouch is the first social network for credit, helping borrowers proactively build their creditworthiness to get better rates on loans, larger loans, or both. Founded by PayPal alumni and former banking executives, Vouch provides a network for everyone, regardless of their credit history, to build credit for the future. In contrast to other consumer lenders that focus on an individual’s credit score in isolation, Vouch analyzes the network of people who know you best to make more informed decisions about your creditworthiness. The company is based in San Francisco, California, and is backed by IDG Ventures USA, First Round Capital, Greylock, AngelList, Core Innovation Capital, Data Collective, Stanford StartX Fund, Pacific Crown, Michael Levit and Cooley LLP. For more information, please visit www.vouch.com.