PeopleFund Company, the South Korea artificial intelligence (AI)-based digital lending platform, has recently closed a $20 million funding round led by Bain Capital.
PeopleFund said in a statement that this signals that the firm has secured additional runway to further scale its partnerships with domestic financial institutions amid global interest rate hikes and an economic downturn, which has ensued in a liquidity freeze in the financial market and startup industry.
With the additional runway, PeopleFund will use the fresh capital to further advance its AI-based risk management technology and widen its scope of application to the entire credit industry, as well as the core algorithm of its credit evaluation model.
This will bring PeopleFund one step closer to its vision of a company that provides customized digital credit solutions to various financial institutions.
This additional funding round was exclusively open to PeopleFund’s existing shareholders, following the Series C round.
A total of nine companies including Access Ventures, CLSA Capital Partners LendingArk Asia, D3 Jubilee Partners, 500 Global, Kakao Investment, TBT Partners, and IBX Partners have also participated the round.
To date, PeopleFund has raised an accumulated amount of $100 million.
Over the course of 2022, PeopleFund raised approximately $240 million from Goldman Sachs, CLSA LendingArk Asia, and Bain Capital to provide credit to the underserved consumer lending market.
As a result, as of December 2022, PeopleFund has deployed $1.3 billion, making it the largest lender in the marketplace lending industry.
Since its inception in 2015, PeopleFund has been operating with the goal of innovating the non-banking consumer lending market through AI technology.
As of June 2021, the company has been licensed as the first marketplace lending platform in Korea.
PeopleFund engineered a high-performance risk management technology for mobile environments, not to mention its proprietary AI and machine learning (ML) based credit scoring system.
PeopleFund’s realized loss and delinquency rate as of December 2022 was 1.3 percent and 2.1 percent respectively, the lowest in the industry.
“2022 will be marked as a year of turbulence for fintech, with the global public market adjustment alongside changes in the macro environment,” said Joey Kim, Founder of PeopleFund.
“Meanwhile, the Korean consumer lending market has undergone a dramatic transition into the mobile sphere, with big players like KakaoPay and Toss leading the change,
“This transition, coupled with the instability of the credit market, is opening up opportunities for tech-based digital lenders and its technologies to highlight our competence compared to traditional financial institutions. I believe we are in the best position in the market right now,” he added.
Founded in 2015, PeopleFund was licensed as the first marketplace lender in Korea and is no.1 player in the domestic industry.
It operates with the goal of innovating the non-banking consumer lending market in Korea through AI technology.
The firm offers loans at reasonable mid-interest rates to the underserved near- and sub-prime consumers, while providing investment opportunities at return rates of around 10 percent to the investors.
With an in-house AI lab composed of CSS modeling and AI technology experts, the firm focuses on specializing in AI-based risk management capability and have acquired the industry’s first preliminary MyData license.