Blockchain-based data exchange Spring Labs raised $30 million led by credit bureau TransUnion.
CEO and cofounder Adam Jiwan explained how they pitched the business to TransUnion.
The California-based fintech provided Insider the pitch deck it used to raise the round.
See more stories on Insider’s business page.
A blockchain-based fintech startup that is aiming to disrupt the traditional model of evaluating peoples’ creditworthiness recently raised $30 million in a Series B funding led by credit reporting giant TransUnion.
Four-year-old Spring Labs aims to create a private, secure data-sharing model to help credit agencies better predict the creditworthiness of people who are not in the traditional credit bureau system. The founding team of three fintech veterans met as early employees of lending startup Avant.
Existing investors GreatPoint Ventures and August Capital also joined in on the most recent round. So far Spring Labs has raised $53 million from institutional rounds.
TransUnion, a publicly-traded company with a $20 billion-plus market cap, is one of the three largest consumer credit agencies in the US. After 18 months of dialogue and six months of due diligence, TransAmerica and Spring Labs inked a deal, Spring Labs CEO and cofounder Adam Jiwan told Insider.
“[TransUnion] saw that our technology was able to obtain certain forms of data that were relevant for establishing the creditworthiness of consumers, that they were not able to obtain using their existing business model,” Jiwan said.
The partnership will allow Spring Labs to leverage TransUnion’s 100-plus strong sales force and access 10,000 of its financial institution customers.
Spring Labs already works with many lenders to support its vast data network. Jiwan said the startup also plans to partner with other institutions that provide credit-relevant data to enhance the network, such as payroll companies.
“One of the first underlying challenges with the current system is that a lot of credit-relevant data doesn’t see the light of day,” Jiwan said. The current credit reporting system only reflects the credit an individual has outstanding, he continued.
“But if you really think about it, other very relevant forms of information, like your income, your employment, your assets, your
liquidity
position, are extraordinarily relevant for your creditworthiness, and very little of that information makes it into the system.”
As a result, Jiwan said, tens of millions of people in the US alone are excluded from the “credit economy.” The Spring Protocol, a set of rules for data-sharing on the platform, assures institutions that their data-sharing will be secure and private, thereby encouraging its use, according to Jiwan.
Spring Labs plans to use the funding to expand its 47-person team significantly in the coming year across a breadth of roles, though Jiwan declined to provide specific numbers.
He said the team plans to add engineers, cryptographers, product developers, data scientists, compliance professionals, and onboarding and customer success personnel.
They also plan to invest in developing additional products and fund their general working capital needs. While Jiwan declined to provide the valuation at which the round was raised, he noted that it marked a significant “step up” from the Series A, in which they raised $23 million.
Here is the 10-page pitch deck Spring Labs used to raise its $30 million Series B round and entice TransUnion to invest. The firm redacted financials and other details before providing the deck to Insider.
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