The news: The UK credit-scoring fintech raised the mega-round from US fund Invus Opportunities, valuing it at £503 million ($645 million), per Sky News. Clearscore says it will use the funding to grow its product suite and staff.
What does it do? Clearscore enables 14 million consumers across the UK, Australia, and South Africa to check their credit score for free. They can also share their bank account data via open banking to be matched with lending products from over 90 partners.
What appealed to investors? Clearscore’s addressable market is growing rapidly.
Over 3 million UK consumers now use open banking services, up from 1 million in January 2020. The technology is proving increasingly popular in credit underwriting: The country’s under-35s are 21% more likely to want to share bank data to access loans than they were at this time last year.
Lenders seeking to meet this demand are more likely to offer their products on Clearscore’s platform because it spares them from having to build open banking capabilities in-house. This should boost the fintech’s revenues as it gets a cut the credit products it recommends to customers. One such lender is neobank Zopa. Last month, by offering its product on Clearscore’s marketplace, Zopa became the first credit card in the UK to use open banking in its underwriting. Already, over 43,000 Clearscore users who wouldn’t have been deemed eligible under normal credit-scoring methods received recommendations for Zopa’s credit card.
Trendspotting: Over the past year, the UK’s three incumbent credit bureaus have integrated open banking solutions, underscoring its growing importance in the credit space.