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Micro lending company secures $25m investment thanks to big data platform

Innovative platform for underscoring retail loans to low credit-score consumers is a hit with VCs after UK pilot.

A pay-day loan company has been able to source $25m in venture capital funding as a result of the innovative big data platform which drives its business.

Silicon Valley start up Global Analytics Holdings (GAH) has secured the investment to grow its Zebit company – a so-called ‘micro lending’ business which gives loans to consumers over short time periods at premium interest rate.

Zebit’s niche over other such sites is that it links to retailers to provide credit assurance for direct purchases. So instead of providing the loan applicant with cash, the loan is used to finance products.

As the customers tend to have low credit scores and can’t access traditional funding products like credit cards, the system underwrites each transaction on an individual basis, using “big, complex streams of data from multiple sources and transforming them into actionable inferences that are superior to using the data streams individually”, according to CEO Michael Thiemann, who describes the Adaptive Data Fusion that the company has built as “the holy grail of risk management.

After testing the waters with a successful UK launch in 2011 which has since built a ‘$50m+’ company, GAH will now look to extend its scope geographically and repurpose the technology for other industry sectors within financial use cases.

“Competitors do their underwriting based solely on the individual,” says Thiemann. “In our  micro-lending launch market, we found that with Adaptive Data Fusion we achieved better, more accurate risk assessments which allowed us to identify responsible customers and pass savings along to them. Our platform-as-a-service offering allows our partners to enter new markets quickly and make them profitable faster. Our platform gets smarter and more experienced with new data, regenerating itself with new models in real-time.”

Big data specialist venture capital firm Mohr Davidow is the lead investor in this latest funding round – series D for Zebit – and joins the likes of Crosslink Capital, Leapfrog Ventures and QED Investors in backing the young company.

“Zebit fits right in with one of our major themes around big data, analytics-driven insights and execution to disrupt and/or create major markets,” said Bryan Stolle, General Partner at Mohr Davidow. “We know the platform works. Their initial launch market in the UK is a profitable $50+ million business. We think this is an exceptional team chasing a very big opportunity, and we’re thrilled to be a strategic partner in this venture.”