Aire, a startup from the UK that aims to modernize the credit scoring system, has secured $11 million in Series B funding. The funding round was led by Crane Venture Partners, a European enterprise VC, with strategic investments from Experian Ventures and Orange Digital Ventures. Existing investors White Star Capital and Sunstone Capital also participated in the funding round. Aire plans to use the additional capital to support its rapid growth, which includes expanding to the US. Additionally, the company plans to invest in the technology behind its credit insights engine, which is designed to make credit checking more equitable for consumers who have limited credit history.
Aneesh Varma, Aire’s co-founder and CEO, explains that the startup aims to address the catch-22 problem of credit, where it takes time to build credit history, but credit is necessary to start building that history. Varma believes that the current credit system does not serve everyone, even those who deserve credit, and that Aire’s approach is to focus on the consumer as the best and most reliable source of data about themselves. The company’s first-party data approach aims to deliver win-win outcomes for both the consumer and the lender.
Varma likens Aire’s role to that of a manual underwriter who uses technology to gain a better understanding of a credit applicant’s life and financial situation in an automated and scalable way. The company’s main product engages with an applicant on a lender’s website when the existing decision engine cannot reach a full decision. Aire enables the consumer to provide relevant financial data that goes beyond just transactional banking data, providing a full picture of the applicant’s circumstances and looking forward rather than just at a historical snapshot.
Aire’s platform utilizes data accessed from the backend to provide immediate outputs to lending partners in real-time. As more performance data of outstanding loans becomes available, the system’s machine learning capabilities enable it to get smarter over time. Founder and CEO Aneesh Varma acknowledges the importance of keeping up with privacy concerns while researching new methods and data streams to improve credit scoring. Aire takes bias in credit scoring seriously and ensures that their model governance process does not discriminate against any individual or protected traits. The company has scored over $10 billion in credit across consumer credit categories, improving credit approvals by up to 19 percent without increasing risk. Currently, Aire serves credit card companies and retail finance, with longer-term finance on their road map. The company typically serves working professionals in the early stages of their financial journey, including contractors, freelancers, and those in the gig economy.
