Announcing Infact’s Seed: modern, real-time credit risk is here
It's time for a new era: real-time data sharing for modern lending
There’s a category of financial infrastructure so large, so unwieldy, and so dominating that few have had the courage to take it on. The barriers to entry are high: a cold start problem, regulatory permissions to secure, and industry scepticism to overcome. As a result, for years these companies have collected their toll on financial markets yet had little incentive to innovate. Instead, they have grown complacent, relying on archaic, legacy infrastructure and providing data that’s inaccurate or incomplete, all too often leaving both lenders and consumers worse off.
Of course, we’re talking about credit reference agencies. Today, when utility companies, insurers and lenders carry out affordability, credit risk, or fraud checks for a consumer, they’re frequently faced with data that’s not just out of date; it’s actively hindering performance and progress in both profitable and responsible consumer lending.
Against that backdrop, enter Infact, a modern, real-time credit bureau.
Infact has now secured its FCA authorisation as a CRA, and as a cloud-native, API-first provider, Infact provides frictionless, granular, timely data for partners to make better and more responsible lending decisions. We were proud to partner with cofounders Will Mason and Andy Milligan for their preseed, and today excited to double down for their seed round alongside AlbionVC, Outward VC, 13Books Capital and Portfolio Ventures.
Why we invested
As Patrick set out in The Regulated Market Opportunity in VC, this is exactly the sort of market we like at Form. It’s:
Enormous
Largely undisrupted
Dominated by technologically weak incumbents, with low customer NPS
These conditions are even more pronounced when there’s a highly technical client base that’s motivated to introduce change and embrace new entrants. Speak to any product manager who has to integrate with a major CRA: it’s a frustrating experience navigating archaic, legacy COBOL mainframes and 30+ day batch data processing, to say the least. This came through incredibly strongly during our diligence processes. APIs are commonplace throughout the internet economy, yet for decades, they’ve been nowhere to be seen when it comes to credit risk or affordability.
So why is now the right time for a new, challenger CRA?
For us, there were a few reasons:
Market inflection: Financial products are changing, with digital and embedded finance putting these legacy infrastructures under even more strain, just as lenders require more granular insight to improve underwriting amid tough macro-conditions. That creates a huge need for a radically different way of doing things, with other data sources not providing the same richness or augmentation potential.
Founder-market fit: Will and Andy have worked together for years, including at a major CRA. They’ve seen inside the beast and know the painpoints of consumer lending inside out, while they’ve also built and scaled high-performing teams for regulated products before. Since founding Infact, the whole team have proven they’re highly capable of not only executing well and hiring strongly — quickly overcoming the cold start problem that can be an issue for CRAs relying on data reciprocity — but also delivering on the vision they set out initially to take on some of the biggest financial infra companies around.
Regulatory inflection: A pincer movement on CRAs is coming: the FCA’s Credit Information Market Study (CIMS) was the first step — including remedies for better quality and more timely data sharing — whileforthcoming BNPL regulation will require BNPL providers to share data with CRAs, who in turn will demand a better quality of service to match their cloud-native, modern approach.
This last point matters in particular for vulnerable consumers and tackling financial exclusion: under the status quo, lenders have little visibility into unaffordable spending sprees because credit data is often delayed by 30+ days, instead of shared in real time. So even when BNPL providers want to make responsible (and profitable!) lending decisions, it can be hard to do so without modern, real-time CRA infrastructure. Similarly, ‘thin file’ customers are frequently denied access to finance because lenders can’t access the granular, accurate and timely data required for precise affordability, credit risk and fraud decision-making, incentivising conservativeness above all.
It is high time for a new approach.
What’s next
Infact is now a fully authorised credit bureau, providing affordability, credit risk and fraud services across financial services. They help lenders uncover new customers, reduce decline rates, avoid inaccurate pre-approvals, offer more competitive rates and limits, and reduce operational costs — all with a modern, elegant, API-first approach.
We can’t wait to see the next phase of the Infact journey, and we’ll continue to work with Will & Andy as this regulated market evolves further, making the case for much-needed innovation and competition in service of better consumer outcomes.
Will Mason & Andy Milligan, Infact co-founders:
You can’t think about the strategic direction of Infact and not consider the tailwind of regulatory disruption that we need to work through, leverage, and guide over the next 5 years.
So when we were fundraising, the Form team’s experience and passion leapt out at us as an easy Yes — albeit with that fear founders have, that they weren’t going to deliver on the promise many investors make to their portfolio companies.
However, Form haven’t just been an investor for Infact; they have really partnered to support our regulatory and policy endeavours as both hands-on contributors and experienced counsel in larger policy matters. They also have an incredible network that is very different to other VCs and are thoughtful about how and when to open that up to their portfolio companies at the perfect moments.
Hit reply with follow up questions, suggestions of technology or policy leaders we should interview, or get in touch if you’re building at the frontier of tech and regulation.