In a round led by a host of Silicon Valley and international investors, auto-title lending-platform developer Finova Financial has raised $52.5 million in combined equity and debt. The investment is one of the largest initial investments in a fintech company and will be used to help grow what Finova calls “the industry’s first all-digital lending platform serving the auto-title loan-marketplace.”
Finova Financial CEO Gregory Keough said that his company and its technology were about more than just helping auto buyers get the funding they need while avoiding the “high interest rates, inconvenient application processes and restrictive terms” he said are all too common in the auto title lending business. “We see Finova Financial as being an advocate for consumer financial well-being through improved access to credit, better repayment terms and lower costs,” Keough said.
Finova Financial CEO Gregory Keough demonstrated the Car Equity Line of Credit (C-LOC) at FinovateSpring 2016 in San Jose, California.
Investors participating in the round included 500 Startups, the UAE-based Al Hamra Group, Metamorphic Venture, MHS Capital, and Refractor Capital. Individual investors included Sam Hodges, co-founder and managing director of Funding Circle, and Jake Gibson, cofounder of NerdWallet. The credit facility was provided by CoVenture.
Finova Financial’s Car Equity Line of Credit enables borrowers to leverage the equity in their car to obtain affordable, same-day, emergency cash funding. Finova provides instant approval decisions with up to 12-month terms, and customers can apply for loans as well as make payments online or via mobile device. In addition, the company has partnered with 32,000 retail outlets in the U.S. to facilitate in-person payments. Finova notes that 70 million underserved Americans spend $138 billion a year in fees and interest on alternative financial products and says that auto title loans in particular charge upwards of 300% in interest. In contrast, Finova Financial’s C-LOC charges a maximum APR of 30%, and all fees, such as DMV lien fees, are rolled into the life of the loan.
Founded in 2015 and headquartered in West Palm Beach, Florida, Finova Financial demonstrated its Car Equity Line of Credit (C-LOC) solution at FinovateSpring 2016.