Anyfin, a startup based in Sweden that easily enables you to refinance your existing loans, including by taking a photo, has picked up €4.8 million in Series A investment. The round is co-led by Accel, and Northzone, with participation from Rocket Internet’s Global Founders Capital, and a number of unnamed angel investors from the consumer finance and fintech space.
Launched in November 2017, and currently only available in its home country despite harbouring wider European ambitions, Anyfin wants to make it easier to competitively refinance (or consolidate) loans and credit cards and therefore not get ripped off with high interest rates or compound interest.
It claims to do this with a combination of AI and publicly available consumer data, and with additional information garnered through talking a photo of your existing loan statement, including your repayment history. This, it says, gives Anyfin a more complete picture than your credit score alone, which is likely the main data point used by the original lender.
“Working in the consumer finance sector for so long we all realised that although consumer finance brings a lot of value to people, it also has this huge downside to it,” says Anyfin co-founder and CEO Mikael Hussain, who spent seven years working at Klarna where he headed up credit risk and decision science.
“Consumers are getting ripped off and paying way too much for their financing, whether that’s credit cards, loans or instalment financing – with no good alternatives. Often consumers are charged in excess of 25 percent annually on part payments and credit cards, even those with good credit scores. In many cases this is due to old and rigid processes that don’t consider the individual consumer’s situation”.
To remedy this, Hussain says Anyfin wants to make refinance “as easy as taking a selfie”. Where there was previously paperwork, the fintech startup has digitised the process, and where there were long forms to fill out, it claims to use AI to capture much of the data it needs.
“All the consumer has to do to save a bunch of money is to snap a picture of the credit card bill or loan statement and we do the rest. When a customer sends us their picture we use OCR to get the data we need, run that through our risk algorithms and, based on that, give the consumer an individual price. Typically, we’re able to cut the cost of financing by more than half,” he says.
Meanwhile, competitors are cited as credit card providers, point-of-sale financing companies, and traditional and neo banks (although I think fintech startups like the U.K.’s Pariti are worth mentioning, too). “In reality consumer credit is everywhere,” says the Anyfin co-founder. “You can barely go into a store where they don’t offer you a financing option, and practically everyone has at least one credit card”.
To that end, the Swedish fintech startup claims to be able to keep costs and rates low by automating its processes, including credit scoring, and cutting out middle companies. The latter sees it operate as a balance sheet lender, meaning that it borrows money from banking partners to finance the loans it sells at a higher interest rate.