The round was led by five of Zest AI’s financial institution customers, including Citi, the company said in a Tuesday press release. It did not report the amount raised in the round.
Zest AI will use the new funding to expand its automation initiatives and drive wider implementation of its lending intelligence platform, LuLu, according to the release.
In addition to Lulu, the company offers solutions for automated underwriting and fraud detection. Its machine learning models enable lenders to achieve, on average, a 25% increase in approvals and a 20% reduction in defaults, the release said.
Zest AI has more than 50 issued and pending patents, 650 proprietary credit models and nearly 300 customers, including credit unions, community banks and large enterprise financial institutions, per the release.
“The convergence of regulatory support for AI, intensifying competition and the need for efficiency is fueling strong demand for our solutions,” Zest AI CEO Mike de Vere said in the release. “This investment enables us to accelerate innovation and scale adoption, helping more financial institutions leverage AI to deliver greater impact for the communities they serve.”
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The customers that led Zest AI’s latest funding round include Citi’s investing group Citi Ventures, Truliant Federal Credit Union, ORNL Federal Credit Union, Members 1st Federal Credit Union and SchoolsFirst Federal Credit Union, according to the release.
Bill Cheney, CEO at SchoolsFirst, said in the release that Zest AI’s technology more than doubled the credit union’s instant approval rate and “has been game-changing for our member experience and our business results.”
Michael Wilson, CEO of Members 1st, said in the release that LuLu has been valuable in benchmarking data against peers, “which allows us to be more nimble in taking decisive action.”
Zest AI introduced LuLu Strategy in May, saying this new model of its AI lending intelligence platform offers lenders a deeper understanding of borrower behavior, loan performance monitoring and policy simulations.
When the company launched an AI-powered fraud detection solution in August 2024, it said the solution instantly detects first-party and third-party fraud and flags income inconsistencies within the automated loan decisioning process.
In August, de Vere told PYMNTS that because an AI model can consume trillions of points of data identify patterns of fraud, “It’s so far beyond where a human can be.”
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