Nova Credit raises $45m Series C round for open finance expansion

Nova Credit has bucked the fintech trend of declining later-stage fintech funding with a $45m injection for its Series C round.

Canapi Ventures, a backer of a number of fintech infrastructure companies, led the round . It also invested in Nova Credit’s as part of the company's Series B round over three years ago. 

That round took place in early 2020, just weeks before the pandemic ushered in lockdowns around the world and threatened Nova Credit’s business model based on cross-border credit reporting.

Now the company which counts the likes of American Express, Verizon, HSBC, SoFi, Scotiabank, and Yardi as customers is riding high as global travel has been bouncing back from the covid freeze with soaring demand for its services with volumes tripling in 2023.

Nova Credit will be expanding its product suite, however, as part of the fundraise by moving further into credit-based open finance, more specifically cashflow-based underwriting.

This helps ‘thin-file’ customers or those who have just moved to a new country to access credit through lenders' use of alternative financial data such as bank accounts.  

“Open finance data has been available for decades, but the industry has failed to assemble it into a suite of products that lenders can easily use to improve their customer onboarding and credit workflows,” Misha Esipov, co-founder and CEO of Nova Credit said.

“While cross-border credit remains critical to our strategy, we’re excited to broaden our offering and tackle a new set of industry challenges long unsolved. This new capital fortifies our position to continue being a dependable partner to the many banks and lenders we serve and accelerates the pace of innovation in an industry very much in need of change,” he added. 

Additional investors in Nova Credit’s series C round include existing backers General Catalyst, Index Ventures, Kleiner Perkins, Y Combinator, and Avid Ventures, as well as new investors Geodesic Capital, Harmonic Capital, Radiate Capital, and Socium Ventures (Cox Enterprises). 

 Nova Credit won AltFi’s One to Watch category at the AltFi Awards 2022.