Abound

Company Overview

Abound is a consumer lending financial firm based in London, UK that provides personal loans. The company was founded by Gerald Chappell and Michelle He, who previously worked at McKinsey & Company and EY respectively. Abound’s mission is to increase access to affordable loans by looking beyond traditional credit scores.

Products Overview

Abound offers personal loans with the following features:

• Loan amounts from £1,000 to £10,000
• Repayment terms from 1 to 5 years
• Representative APR of 25.8%
• Decisions within a day and funding within a day if approved
• Flexible repayment options including overpayments and payment holidays
• No early repayment fees

The company uses AI and open banking technology to assess loan applications, looking at factors like income, spending habits, and affordability rather than just credit scores. This allows them to lend to people who may be rejected by traditional lenders.

Founding Team

• Gerald Chappell - Co-Founder and CEO. Previously a Partner at McKinsey & Company where he was Global Head of Digital Lending and Global Head of Credit Analytics.

• Dr. Michelle He - Co-Founder and COO. Previously a Director at EY serving banks and financial institutions on lending and credit analytics. Has a Ph.D in machine learning.

Problem and Market Fit

Abound aims to solve the problem of limited access to affordable credit for many people in the UK. The founders state that over 15 million people in the UK struggle to borrow for unexpected costs and are often rejected by high street banks or forced to use high-cost lenders.

By using AI and open banking data to assess affordability more holistically, Abound can offer loans to people who may be rejected by traditional lenders that rely heavily on credit scores. This allows them to expand access to credit while still making responsible lending decisions.

Business Model

Abound generates revenue through the interest charged on personal loans. Their business model relies on using technology to make more accurate lending decisions, allowing them to lend to a wider range of customers at competitive rates while managing risk.

Funding and Runway

Abound has raised significant funding to fuel its growth:

• May 2024: Raised £0.8 billion in new funding round
• March 2023: Raised over £500 million in investment
• February 2022: Secured £40 million in funding
• April 2021: Raised £32 million in equity and debt funding

The company’s total funding now amounts to up to £1.3 billion. This substantial funding provides Abound with significant runway to expand its lending operations.

Competitive Landscape

Abound competes with traditional banks, credit card companies, and other fintech lenders in the UK personal loan market. Their key differentiator is the use of AI and open banking data to make lending decisions, allowing them to serve customers who may be rejected by traditional lenders.

Some competitors in the UK personal loan space include:

• High street banks (e.g. Barclays, HSBC, Lloyds)
• Credit card companies
• Other fintech lenders (e.g. Zopa, RateSetter)

Customers

Abound targets UK consumers who may struggle to access affordable credit through traditional lenders. This includes:

• People with limited credit history
• Recent graduates
• People who have recently moved to the UK
• Those looking to consolidate existing debts
• Consumers seeking loans for major purchases or life events

The company emphasizes that it can serve customers who may be rejected by lenders that rely heavily on credit scores.

Relevant News

• May 7, 2024: Abound raised £0.8 billion in new funding to expand access to fair credit, bringing total funding to up to £1.3 billion.

• March 6, 2023: Raised over £500 million in investment to expand its offer of smart, affordable loans to more UK customers.

• November 24, 2022: Rebranded from Fintern to Abound.

• February 9, 2022: Secured £40 million in funding to scale its credit technology.

• September 23, 2021: Appointed Andrew Bloom, founder of Masthaven Bank, as a Non-Executive Director.

• April 15, 2021: Raised £32 million to expand access to affordable loans in the UK.

• March 29, 2021: Appointed Dr. Mark London as Chief Risk Officer.

• March 8, 2021: Officially launched consumer lending driven by AI and Open Banking.

Abound has shown rapid growth and attracted significant investment since its launch, positioning itself as an innovative player in the UK personal lending market using technology to expand access to affordable credit.