It seems that every week we hear of new financing rounds or new entrants in the online lending industry. This week was no exception when we heard about ZestFinance’s $150 million debt financing round from Fortress Investment Group. Their overall funding now totals $250 million. I had the chance to talk with Douglas Merrill, ZestFinance’s founder and CEO to learn more about their product offerings. Douglas was previously CIO at Google and is leaning on his experience there to apply Google machine learning to unsecured consumer loans.
ZestFinance is a little different than most consumer online lending companies. In addition to having two different loan products, they also license their credit decisioning software. The largest partnership using their machine learning software came back in June of 2015 when they announced their partnership with JD.com, China’s largest direct sales company.
The latest influx of cash is slated to grow their unsecured installment loan business which operates under the name Basix. Launched just a few months ago, the Basix loan product focuses on consumers with credit scores from 620-700. The average loan size is $4,000 with rates varying from 26% to 36%. To date, they have provided millions of dollars to thousands of borrowers with this product. [Read more…]