Lendbuzz provides access to auto loans to consumers, particularly the underserved segment of foreign residents and students in the US. This consumer segment in the US often faces difficulties accessing financial services as they are typically deemed as a credit risk by consumer banks, making it challenging for them to make big ticket purchases such as cars.
To address this issue, Lendbuzz obtains consumer data and conducts its own credit assessment powered by alternative data and machine-learning algorithms. At the same time, the company also partners with over 1,000 auto dealerships and dealers nationwide, offering them Lendbuzz’s proprietary software products to streamline loan origination and application processes. Amitay Kalmar, CEO of Lendbuzz, said.
Credit transactions and lending are indeed very traditional industries. While most auto dealerships conduct their operations on paper, we offer them SaaS solutions. On the other hand, we provide consumers with a better experience by leveraging mobile technology to access loans in real-time.
Established in Israel in 2015, Lendbuzz has since ventured into the US market, operating its business from Boston, Massachusetts. It is currently steadily expanding its operations across the US, where according to TransUnion (US consumer credit reporting agency), more than 45 million of the population are either unserved by the formal financial sector, or have limited access to credit. Lendbuzz’s predictive algorithms for automotive finance can be applied to other sectors as well, potentially expanding its addressable market in the future through expansion into more use cases in other fields. The company is now a unicorn after attaining a valuation of US$1.1 billion at a fundraising round in October 2023.
Lendbuzz's competitive advantage lies in a combination of its advanced scoring models based on accumulated data on customer segments, strong dealer networks, quick approval speed, competitive interest rates for users, and user experience (UX). MUIP invested in the company in June 2021 with the belief that it can be a strong market leader.
