Credit Sesame Secures $43M in Funding En-Route to its IPO

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by Wanguba Muriuki · 3 min read
Credit Sesame Secures $43M in Funding En-Route to its IPO
Photo: Credit Sesame / LinkedIn

Consumer credit health management platform Credit Sesame announced that it received over $43 million in funding before its IPO with funds earmarked for AI algorithms and business expansions.

The household debt in the US continues to surge amidst various aspects that include the country’s trade wars with China. In Q2 2019, the debt hit a record $13.86 trillion which is a 1.4% increase from Q1. With that, credit health management has become an important tool for most households. Amidst that entire debt surge, a financial health startup Credit Sesame reported that it raised $43 million ahead of its scheduled IPO.

Credit Sesame wants to expand the available tools to enable consumers to better handle their outstanding loans. Users can engage the service to check their credit scores and find solutions to improve their general financial health. Signs of the demand for Credit Sesame’s services are evident from its success to date.

The Founder and CEO Adrian Nazari announced that the company is already profitable. He added that revenues are growing by 90% yearly since 2014. The CEO expects that this will be the last funding round before the company goes public. Even though the company’s valuation remained hidden, Nazari speculates that it might be more than $1 billion.

Credit Sesame has not disclosed its valuation since the latest funding round is likely to have more money invested in it. Cumulatively, the company has raised around $110 million.

The Funding Participants

The funding was led by ATW Investors. Others include IA Capital Groups, Menlo Ventures, Stanford University, Inventus Capital, Capital One Ventures, Symantec, and Globespan Capital. Credit Sesame explained that the funding will be earmarked for artificial intelligence (AI) algorithms and business expansions.

There exists competition from NerdWallet, ClearScore, Credit Karma, Equifax, Experian, and several others. However, Credit Sesame is confident that its unique approach will enable people to manage their credit score better than these competitors.

Credit Sesame plans to make more progress in developing machine learning and artificial intelligence capabilities with this funding round. It aims to provide its customers with access to more personalized and actionable insights to improve their financial and credit health quickly and at scale.

Also, the company wants to use some of the money to expand product, engineering, data science, and marketing teams in Mountain View and San Francisco offices. Many technologies are available in the current market for managing assets. But very few tools are available for consumers to manage the liability side of the balance sheet.

Credit Sesame comes in to simplify the complicated calculus of the consumer’s qualifications, credit, and market offerings. The company ranks as the leading Personal Credit Management (PCM) platform for managing credit decisions for better credit and financial health. Its RoboCredit technology automates and simplifies the management of consumer credit and liabilities. Nazari said:

“Our newly developed PCM platform ushers in a new era of Personal Credit Management with personalized analysis, machine learning and self-driving guidance to help consumers make the right decisions at the right time to better their credit and financial health.”

The company excellently leverages aggregated data and advanced analytics at scale to offer consumers with customized, practical insights. These solutions assist consumers in the management and improvement of their credit and financial health. The CEO added:

“Credit Sesame was the first company to offer consumers free and monthly access to their credit picture including their score and credit details. However, we quickly realized that access was only the first step. Consumers need guidance to understand credit to effectively manage and improve it.”

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