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Exclusive: Koyo lands £100m to bolster lending, extends Series A

Koyo's expansion of its debt facility comes as it continues expansion in UK near-prime consumer credit market.

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Fintech lender Koyo has secured a £100m debt facility and nabbed a £5m extension of its Series A funding round, AltFi can exclusively reveal.

The new cash comes from Atalaya Capital Management, an investor when it first closed the round one year ago, on the debt side. The equity portion comes from other existing investors Force Over Mass, with participation from all previous investors: Forward Partners, Frontline Venture and Atalaya Capital Management. Seedcamp and Matt Robinson (the founder of GoCardless and Nested) are also earlier-stage investors in the firm.

Koyo, founded in 2018 and launched in 2020, is a consumer lender purely using bank transaction data - via open banking - to assess borrowers and underwrite risk rather than using credit agency scores. Its team is made up of a number of alumni of fintech lenders such as RateSetter,Zopa and LendInvest.

Thomas Olszewski, Koyo’s founder and CEO told AltFi why the company turned to existing investors for the top-up.

“This is a bad environment for fundraising. We have four venture capital funds already invested in Koyo, so it's a lot easier to tap those people for funds, rather than running the whole process and going out,” he said. 

“I expect there will be fundraisers in the future, where we bring in kind of new outside investors. But this time around, I think it's great to have a supportive group of investors already invested in the company,” he added.

Olszewski says the lender is now more focused on moving towards sustainable revenues.

“We have been looking more at profitability than ever before. In the past, we were making some decisions that we're definitely optimising for growth. Today, we're still growing but take taking a more balanced view to improving the economics as much as we can."

The new cash comes in tandem with a key new hire for Koyo in the form of a new chief financial officer David Cain whose previous roles include fintech credit card Jaja Cepa, debt collection agency Hellas and Rothchild as well as JP Morgan’s structured finance business.

Its executive team now consists of Olszewski (founder & CEO) Paul Martin (Head of Risk) Peter Kent (CMO) Guy Evans (CTO) Mandy Ellis (Head of Compliance) and David Cain (CFO). 

The compant has originated just over £50m of loans in two years, mostly via comparison sites, which Olszewski says is an increasingly interesting environment for customer acquisition.

"A lot of people are leaving the market. If you're acquiring customers on comparison sites, I'd say there are fewer people on these comparison sites than there were six months ago or at the start of the year. This is our observation. It's hard to get concrete, factual information because usually, people don't publicise that [they have left the market]," he said.

"Just from our own data, it seems like the market's a lot thinner. We haven't seen a decline in the people applying for our loans, we haven't seen a decline in originations, we haven't seen anything like that," he added.

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