Loan application provider iCreditWorks wins WebBank investment

New financing adds to exising collaboration as POS financing continues to gain ground

by | June 14, 2022 | bobsguide

US mobile loan application platform, iCreditWorks, has secured a strategic investment for an undisclosed sum from Utah-chartered industrial bank, WebBank, to support its continued commercial growth.

iCreditWorks intends to use the investment to accelerate the commercial growth of its omnichannel platform, including its mobile POS app.

The investment puts iCreditWorks’ valuation at $200m and builds on the duo’s existing relationship of WebBank issuing the loans provided via the fintech.

“We continue to expand our relationship with WebBank to ensure our alignment and to fuel our mission to reimagine POS financing,” said Stephen E. Sweeney, chairman and founder of iCreditWorks.

In tandem with the strategic investment, iCreditWorks is also eyeing a capital raise, reported to be around $50m, to fuel its continued growth in the dental sector and expansion into new verticals, including auto and home-improvement loans.

“We made this investment in iCreditWorks to support the vision and innovation of their Platform,” said Jason Lloyd, President & CEO of WebBank.

iCreditWorks operates a mobile-based loan application platform, providing customers with multiple loan options (issued by WebBank) to support their dental treatment.

iCreditWorks prepares for growth with hires

The strategic investment from WebBank adds is the latest in a series of growth initiatives for iCreditWorks.

In June, the company secured a new CEO in Scott Young, the former CCO of Goldman Sachs’ Marcus consumer business.

Prior to him, the company had announced three other senior hires for chief compliance officer, director of strategic accounts and chief growth officer roles.

Beyond hiring, the company also expanded its POS suite of financing products in April to include a 12-month% annual interest rate loan product. The financing product allows customers to divide the principal loan balance into 12 monthly instalment  without any interest.

POS financing popularity invites investment

WebBank’s investment in iCreditWorks comes as banks look to partner with fintech to capitalise on the rising popularity of POS financing while compensating for any business lost to the challengers.

According to McKinsey’s consumer lending pools data, banks have suffered losses between $8bn and $10bn annual revenues.

The data also projects US credit origination at point of sale to reach about 13% to 15% of unsecured lending balances by 2023, up from 7% in 2019.

The accelerated adoption of alternative financing products like buy-now-pay-later (BNPL) has further fuelled interest from investors and consumers, providing auspicious conditions for start-ups to grow.

In May, UK BNPL start-up Tranch, raised £3.5 million in pre-seed equity and debt funding to support its growth and expansion into the US.

German BNPL group Mondu also secured $43 million in a Series A round to scale its capabilities amid its European expansion plans.

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