Yendo Raises $165 Million for ‘Vehicle-Secured’ Credit Card

Yendo, a FinTech offering a credit card tied to users’ car equity, is $165 million richer.

The company announced the new funding — $150 in debt financing, $15 million in equity — Thursday (May 16), saying it would use it to fuel the growth of originations on its platform, letting it extend credit to more users at affordable rates.

“Yendo provides a vehicle-secured credit card with prime rates to the millions of Americans who have historically lacked access to the financial system because of their credit score,” the company said in a news release.

The company lets underserved consumers tap into the equity of their car to access up to $10,000 of revolving credit at interest rates comparable to unsecured super-prime credit cards. The card is also available to customers who don’t own their vehicle but want to refinance their auto loan through Yendo.

“As customers pay down their auto loans each month their Yendo credit card availability increases proportionally,” the release said. “This fills a gap in the market by giving consumers who otherwise might not be approved for credit the opportunity to leverage one of their most valuable assets to enter the financial system and start building their credit.”

The company’s funding round comes as credit cards are undergoing a major transformation, as PYMNTS wrote earlier this week.

“The movement toward digital channels, mobile devices, and the hypergrowth of advanced technologies such as artificial intelligence are changing the very ways in which cards are created, distributed, personalized and used,” that report said.

“The spate of announcements from Visa this week introducing seven new payment products contained an offering that helps to further what might be termed the ‘reimagination’ of the card.”

The “one card” concept, PYMNTS wrote, lets a single, digitally-issued card “toggle” between debit, credit, pay-over-time options and cryptocurrency, thus eliminating the clutter for consumers that results from juggling various banks’ credit and debit cards.

“Cards are nearly ubiquitous. But how they’re used varies depending on where you look,” PYMNTS added, pointing to research showing that Generation Z consumers, for example, are the most likely to use credit products or services to better manage their spending and cash flow.