Toronto-based online lender QuadFi has entered into an agreement for a new financing facility of up to $127 million CAD ($100 million USD) from Crayhill Capital Management.
QuadFi plans to use this funding to provide personal loans to customers with a “thin credit history but bright prospects.”
“Canada welcomes 400,000 new immigrants every year—and they deserve access to fair and affordable financial products.”
-Manny Nikjoo, QuadFi
Founded in 2018 by first-generation immigrants, QuadFi claims to use alternative data from domestic and international sources, and proprietary artificial intelligence and machine learning modelling to provide personal loans to underserved groups like young people and immigrants—segments typically turned down by traditional lenders.
According to QuadFi, the firm’s underwriting model differs from traditional risk rating models, which the startup says “rely only on the historical behavior and income of customers.”
Conversely, QuadFi’s model takes into account customers’ future income and career trajectory. The startup targets clients with a limited credit history but “a strong current income and a bright financial outlook.” The company does this in part by allowing immigrants to leverage the financial history they have built in the countries they have left.
“Canada welcomes 400,000 new immigrants every year—and they deserve access to fair and affordable financial products,” said QuadFi co-founder and CEO Manny Nikjoo. “Our model incorporates credit data from their home countries, alternative data and open banking to provide accurate underwriting and deliver financial inclusion today.”
Nikjoo described the financing from Crayhill as “a big step” towards QuadFi’s long-term goal to foster financial inclusion.
Crayhill is a New York-based, minority-owned private credit manager. Crayhill Managing Director Sloan Sutta said the firm is “incredibly excited to partner with QuadFi and support their mission-driven growth.”
Last July, QuadFi announced that it had received strategic investments from Ritu Banga—the wife of Mastercard’s former CEO and current executive chairman, Ajay Banga—and Bruce Simpson, CEO of the Stephen A. Schwarzman Foundation and former managing director of McKinsey Canada. Banga and Simpson both joined the company’s advisory board.
In October, QuadFi disclosed that it had signed contracts with several credit agencies outside of Canada to access and translate foreign credit scores, inking deals with firms in the United States, Mexico, Nigeria, and the Philippines.