Revolut ‘mafia’ line up for fintech lending startup Pillar’s £13m pre-seed

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Immigrants cannot “transmit” their credit history from one country to another, which fuels financial exclusion. Revolut’s former loans boss wants to change that.

Image source: Pillar

The race for challenger credit cards is heating up and a new fintech aimed at taking on Amex has its sights set on BNPL-like services from Monzo and Curve.

Pillar, a new lending platform for immigrants, has raised a £13m pre-seed round led by Global Founders Capital and Backed VC.

The company, founded by CTO Adam Lewis and its CEO, former Revolut loans manager Ashutosh Bhatt, is developing a lending platform that will provide immigrants with access to credit products when moving to a new location. country. A launch date is planned for the third quarter of 2022.

With the current structure of the credit referencing market, a consumer cannot transfer his credit report from one country to another. This means that almost all immigrants, except the wealthiest, find themselves excluded from everyday products such as credit cards and loans. Those who manage to access a product end up paying a disproportionately higher cost of borrowing.

Pillar’s central idea, said Bhatt AltFi, is to facilitate immigrants’ access to credit and thus to build something that will also appeal to all customers, immigrants or not. This is both to capture a generational shift in working patterns that will see a generation of workers vastly more mobile, as well as a long-standing problem for those relocating overseas.

Bhatt knew the problem all too well when he immigrated to the UK from India with a good job at Barclays Bank in 2008 but was refused credit to get an iPhone.

“Fourteen years later, and the world of credit still hasn’t changed, so we set out to build a globally scalable platform that breaks down data silos and credit boundaries and solves this massive problem faced by financially secure people moving to a new country.”

But what’s important is gambling on an increasingly global workforce as remote working becomes the norm.

“The next generation is much more mobile than us, much more global than us. They are global citizens of the world,” he said.

“You have Gen Z who don’t have a permanent address and keep moving from town to town. We’re for them,” he said.

“If TransferWise, Revolut, Spotify and even Apple can look at you as UK and as US, why can’t the lender look at you like that?” he added.

While Nova Credit is operating in the same market, albeit in a B2B manner, no one is trying to solve the problem directly for consumers. This is where Pillar aims to insert itself as a ‘spider’s web’ of data enabling a ‘true global credit passport’.

“That means no matter where you go, your credit follows you. So far no one has done it right. Amex did it for the super rich, HSBC did it for its early customers. We want to do this for everyone. We’re trying to help people get on the credit ladder,” Bhatt said.

Users will be required to connect their bank accounts through an open bank, which will help build their credit decision. The use of open banking is essential and would not have been possible a few years ago, he says, due to a lack of coverage outside the UK. Today, with open banking having reached critical mass in more and more areas, this is the case.

The end goal is that users will have the ability to create their credit reports in the United States, Australia, and the United Kingdom. Pillar will operate in both the UK and the US. These are “the two largest centers of immigrants,” Bhatt says.

“In my previous role at Revolut, it was a Herculean task to coordinate the credit bureaus across countries, they [the credit bureaus] simply don’t have the technology to be reached outside of each region. As a result, there is a data disparity that means people have to start over every time they move to another country. Our intention is to examine consumers based on their credit footprint globally, not country by country. »

The UK and Europe are “just the start”, says Bhatt, with plans to launch in the US, Africa and Asia.

“It is time for credit products, as well as credit data systems, to be redeveloped from the ground up, there has been no real innovation in the last half century in this space.”

The business model will target line of credit subscriptions rather than earning interest on outstanding monthly balances, Bhatt says. “We are not here to earn money with interest”.

The cash needed to fund the loans, he adds, will come from the wholesale funding lines of banks and other large financial institutions.

A number of former and current Revolut employees also took part in the increase, including former chief financial officer Peter O’Higgins, former Revolut marketing director Chad West Neil Shah and collections manager Hardev Tumber. .

Despite its relatively young age, Revolut has seen a number of early senior employers move into new roles in recent years within fintech and the wider tech space. Like a number of its tech peers, such as Deliveroo, N26, Monzo and Klarna, this “mafia” has increasingly become founders or early employees of other successful startups or angel investors themselves.

Other angels contributing to Pillar’s rise include WageStream founders Peter Briffet and Portman Wills, as well as power investor and former AirBnB VP and investor Oliver Jung.

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