Pagaya, a U.S. and Israeli FinTech collaboration, announced a Series D funding round in which it raised $102 million, according to a press release, bringing the company's issuances to over $1 billion in the past year and a half, the Pagaya said on its website.
Participants in the round included Aflac Global Ventures, Poalim Capital Markets, Viola, Oak HC/FT, Harvey Golub (Pagaya board member and former chairman and CEO of American Express), Clal Insurance Ltd., GF Investments, and Siam Commercial Bank.
The investment raised Pagaya to over $200 million in consumer credit asset-backed security (ABS), the release states. The company said on its website that it plans to manage the unsecured loans purchased with the money.
The release touts the significance of the milestone in today's pandemic times, being the first issuance among marketplace lenders in months. Pagaya said it has effectively jump-started the ABS market.
Pagaya said on its site it uses machine learning (ML) in order to deliver low-risk, high-yield investments. New clients can be added to the ABS for a period after the close.
Pagaya, not deterred by the pandemic-related economic chaos, said on its site that its investment opportunity pipeline is still on target to hit $500 million per month by the end of the year.
Lending has been at a low point for the past several months during the pandemic as lenders aimed to avoid unnecessary risks amid mass closures and layoffs around the world, PYMNTS reported. But now, businesses have some cautious optimism amid reopening.
The lending arena saw a shake-up following the 2008 recession, with FinTechs able to come in and digitize the borrowing experience while the public was largely shying away from using traditional bank lending.
Snehal Fulzele, senior vice president and general manager of Cloud Lending at Q2, told PYMNTS that FinTechs should continue to take advantage of new technological ways to account for cash flows and online reviews as ways to determine how a recipient of a loan can eventually pay it back. Fulzele said that will be essential in the post-pandemic world as many small businesses have had to change their overall models to adapt to the financial climate.
Fulzele said he had been heartened by the overall humane responses taking into account the shared difficulties of the times.