News: Money will be used to grow its platform.
Fintech funding has reached new heights with Finova Financial’s record breaking initial round.
The car title lending platform raised $52.5 million in a combination of equity and credit facility, making it one of the largest initial rounds in fintech history.
The round was led by Silicon Valley and international venture capital firms such as: MHS Capital, Refactor Capital, Metamorphic Venture, 500 StartUps, and more. The company said it will use the money to grow its all-digital lending platform that serves the car title loan marketplace.
Finova is a business that is basically providing loans based on the equity in your car. It was founded in 2015 and it offers products such as Car Equity Line of Credit, which it says costs 70% less than the current US average.
CEO Gregory Keough: “Finova Financial was launched to help consumers get critically-needed cash without the traditional barriers of high interest rates, inconvenient application processes and restrictive payment terms of the auto title lending industry.”
“As a company committed to social impact, we see Finova Financial as being an advocate for consumer financial well-being through improved access to credit, better repayment terms and lower costs.”
What makes Finova an appealing investment is the potential market size that it can grow in to. The company says that in the U.S there is currently 70 million underserved customers paying $138bn annually in fees and interest on alternative financial products.
This is of course a financial burden on many, especially with often exorbitant interest rates. So Finova is using a cloud based lending platform in order to eliminate this model by establishing one that helps people to create, or rebuild, credit through transparent loan repayment terms.
David Lee, Co-founder and Managing Partner, Refactor Capital said: “Greg and his team have done an incredible job of building the financial technology company of the future to cater to the very specific needs of the non- and under-banked in the U.S..”
“Finova has earned great traction, and we look forward to working closely with them as they scale rapidly, giving consumers the opportunity to get back on track financially.”