Updraft: Disrupting the UK Consumer Lending Landscape with Affordable Credit Options and Financial Empowerment

This agreement helps us serve even more customers to manage their finances.

SMEBRJanuary 3, 20:08
Revolutionizing UK lending

Photo Credit (Updraft)

Updraft, a UK-based leading FinTech company, is making waves in the consumer lending sector with its innovative approach to credit and financial support. Founded in 2017 by Aseem Munshi, who brings valuable experience from leading HSBC's credit card business, Updraft emerged to challenge the conventional norms of the lending market. The company aims to revolutionize the industry, which has long been characterized by exorbitant interest rates on credit cards and banks imposing fees for early loan repayments. Updraft is committed to providing consumers with more affordable credit options while simultaneously equipping them with tools to enhance their spending and savings habits.

At the core of Updraft's mission is a dedication to helping households in the UK break free from the burdens of expensive credit cards and overdrafts. The company employs a distinctive blend of bureau data, open banking data, and behavioral analytics to refine the underwriting of credit risks. Through this innovative methodology, Updraft has successfully lowered the overall cost of credit for consumers, marking a significant departure from traditional lending practices. Leveraging the power of open banking, Updraft compiles comprehensive reports that offer valuable advice and a range of lending options, empowering individuals to make informed financial decisions tailored to their needs and circumstances.

Recent Development

Updraft recently raised an impressive £272 million in funding, showcasing its growth and significance in the financial technology sector. 

The funding includes a £250m forward flow arrangement with Jefferies Financial Group and Santander Corporate and Investment Banking, in addition to senior financing from Santander CIB. Furthermore, the company secured an extra £22m in Mezzanine and equity investment, with leadership from Quilam Capital, MoreThan Capital, LC Nueva AIF, and Auluk Investments. 

Updraft's main objective is to help UK households in transitioning away from expensive credit cards and overdrafts. This is achieved through a distinctive combination of bureau data, open banking data, and behavioral analytics to enhance the underwriting of credit risks effectively. This innovative approach has notably reduced the cost of credit for consumers.

The funds obtained will be utilized to propel Updraft's mission into 2024, focusing on helping customers in achieving 'debt zero' through transparent payoff routes. The company aims to introduce additional value-added features, explore novel channels to reach diverse customer segments, and solidify its position as a frontrunner in financial support and guidance.

Having experienced a robust year, Updraft expanded its user base to 500,000 and helped individuals in settling over £225m in credit card and overdraft debts. Updraft's advanced risk models have demonstrated superior performance compared to traditional bureau-based credit risk models. 

Updraft CEO, Aseem Munshi, conveyed enthusiasm for the deal, stating, "This agreement helps us serve even more customers to manage their finances. The size and term of the deal give us a long window to focus on building our products, processes, and strategy for future growth while we continue to manage risks and build a profitable business. This is another key milestone delivered by the amazing team Updraft."

Pradeep Krishnamurthy, MD, Head of ABS Originations at Jefferies, also shared thoughts on the deal, noting, "Our review of Updraft’s processes and underwriting gives us confidence in their ability to originate and manage a high performing loan book."