UK fintech Koyo raises £3.8m to aid wiped credit histories
UK-founded fintech start-up Koyo, which gives loans to people with younger or partly-wiped credit scores, has raised £3.8 million (US $4.9 million) in a mixture of debt and equity funding.
Led by London-based ‘venture fund meets start-up studio’ Foward Partners, the round also saw participation from European global market investor Seedcamp, founder and CEO of non-bank mortgage lender LendInvest Christian Faes, and founder and CEO of real-time financial crime insights platform ComplyAdvantage Charles Delingpole.
Designed to help those who have a short, untested credit history behind them, Koyo has been working since 2018 to help migrants or people who have never found themselves in a position of taking credit or being the main bill payer.
“When I moved to the UK from the USA my credit history did not come with me,” says Koyo’s founder Thomas Olszewski, who came to create the start-up after working at Dublin-based Frontline Ventures VC.
Olszewski adds: “This made getting a credit card or loan difficult, if not impossible. I realised this is a problem that affected millions of people who are new to the country, but also people who have not built a credit history in the UK more generally.”
Even if people with smaller credit histories do get loans, fees will generally be a lot higher. Koyo uses up-to-date open banking data to determine whether an individual can afford a loan. By expanding loans to the “underserved” population, or those often targeted by payday lenders, Koyo is confident its can succeed.