ZestFinance, a Los Angeles, California-based credit-decisioning technology and consumer lending provider, raised $150m in funding.
Funds managed by affiliates of Fortress Investment Group LLC (NYSE: FIG), a firm with approximately $70 billion in assets under management, made the investment.
The company, which has raised more than $250m in total, intends to use the funds to extend the reach of Basix loans in the near-prime market.
Founded in 2009 by Douglas Merrill, CEO, ZestFinance has developed a credit-decisioning technology platform, built on machine learning, which analyzes tens of thousands of data points to effectively evaluate creditworthiness. The technology identifies good borrowers in the near-prime credit segment where traditional credit scores indicate lower credit quality, giving the company’s Basix loans the ability to serve borrowers overlooked by banks.
Basix loans are available for a three-year term at fixed annual percentage rates (APR) from 26% to 36%. Monthly payment amounts and APR do not change over the loan’s lifetime. Loans currently range from $3,000 to $5,000.
Basix provides a 15-day grace period to give borrowers every opportunity to make on time payments.