Nordigen has now raised a total of $1 million of funds for developing automated credit scoring solutions.
Latvian startup Nordigen has announced an $800,000 investment round from Seedcamp and Inventure. Combined with previous investments from Change Ventures and Imprimatur, it brings the startup's total funding to $1 million.
The startup creates an improved and automated credit scoring system, which allows for more individuals to be cleared for loans than without Nordigen. This disrupts the banking industry's credit specialist and credit bureau areas, as Nordigen is able to significantly increase the amount of loan applicants, without increasing the risk for the lending institution.
Nordigen uses the applicants' banking data to process their habits at a more nuanced level than current to more accurately assess their ability and likelihood of being able to repay the loan.
"It's hard to love credit bureaus at the moment. What they do was necessary, but with the rise of Open Banking, we're now able to build technologies that are much faster, more reliable and more customer-friendly than traditional credit checks. This is a great time to build a global alternative to credit bureaus,” says Rolands Mesters, co-founder of Nordigen.
The startup's algorithm has already processed over 1 billion transactions since being established in 2016. With a growing client base and recognition in the industry, Nordigen has been able to find support from powerhouse investors like Finland's largest venture capital fund, Inventure, and Europe’s leading seed investor, Seedcamp to join pre-seed investor Change Ventures.
“Credit and debt are two major foundations of our financial system. The evaluation of creditworthiness has been much slower to progress, prohibiting many potential customers' access to financial services. We're excited to back the excellent founders of Nordigen and strongly believe in their desire to provide a more clear and transparent process making it easier for financial institutions to engage with more creditworthy customers and, in turn, for more customers to engage with financial services,” comments Carlos Espinal, Managing Partner at Seedcamp.
“The credit scoring industry has long been dominated by credit bureaus and other legacy software. This means that a lot of people who should not receive loans are getting loans and a lot of people who would be creditworthy, do not get their loans accepted or the loan is over-priced. Nordigen has a proprietary software solution that already today can outperform major credit bureaus in certain markets,” says Lauri Kokkila, Investment Manager at Inventure.
With the recent investment, Nordigen aims to approach new markets, such as Brasil, South Africa, the USA and the UK, while simultaneously focusing on sales and business development.
In order to support this increased activity, Nordigen is hiring for a variety of different positions.
Nordigen was established in 2016 in Riga, Latvia by a two Google Demo Day graduates, Rolands Mesters and Roberts Bernans. Today the company works with banks and alternative lenders in 12 countries across the world, including the Baltic states, Spain, Finland, Poland, Denmark, Sweden, Germany, Czech Republic, Australia and New Zealand.