Starting over financially while moving to a new country is one of many challenges that come with it. Nova Credit was established to assist immigrants with applying for apartments or loans in the United States without a credit history. Nova Credit began as a doctoral research project at Stanford University roughly seven years ago.
“We discovered that overseas students make about half of the graduate student population at any university. If you go and question them about their experience with financial services, you’ll hear some variation of the same story: ‘I can’t obtain credit or I can’t get a credit card. The CEO and creator of Nova Credit, Misha Esipov, stated, “Or I need to go ask my classmate to co-sign for an apartment or mobile phone contract.
Through its APIs, Nova can access credit bureau data from different countries through its Credit Passport offering. The product was initially introduced by Nova with American Express, and dozens more financial institutions, including HSBC, Scotiabank, Verizon, and Earnest, were joined. Applications from those institutions have embedded versions of Nova Credit.
It also functions in 20 other nations outside the United States. For instance, if a person from the United States relocates to London or Singapore, they can use Nova to obtain acceptance for international banking products in those markets.
In recent years, the business has gone beyond its original Credit Passport offering to provide everyone – not only immigrants – access to their bank account and the possibility to utilize alternative data for credit. Cash Atlas is a cash flow underwriting program that enables anybody with a U.S. bank account to allow the information contained in those accounts to be utilized to assist them in applying for credit. Examples of this information include a rent payment history or direct deposit of wages. The tens of millions of individuals who are “effectively locked out of the U.S. financial system,” according to Esipov, are the target audience.
“From a single product firm, we’ve started to grow into a multi-product company and platform…In an interview with TechCrunch, Esipov stated, “Our strategy is to evolve into a more data analytics company that serves not only new immigrants to this country but honestly any customer segment and plugging the gaps in this outdated traditional credit reporting industry that doesn’t do well for serving customers who are new to credit.
Esipov exclusively disclosed to TechCrunch that Nova is announcing today that it has secured $45 million in Series C investment, extra funds that it expects to utilize to expand both its product offering and geographically. It was put together “in a matter of weeks,” he claimed.
New investors like Avid Ventures, Geodesic Capital, Harmonic Capital, Radiate Capital, and Socium Ventures (Cox Enterprises) joined current backers Kleiner Perkins, General Catalyst, Index Ventures, and Y Combinator in the round, which was led by Canapi Ventures.
The firm hasn’t received outside money since February 2020, making the fundraising rather unusual in the fintech sector, which saw a significant increase in capital in 2020 and 2021. At that time, Nova obtained a valuation of $295 million following its first closing on a financing that saw it raise $50 million.
Esipov would only state that Nova was “xxxx happy” when asked about the company’s worth. He also refrained from providing specific revenue statistics, merely stating that the company’s revenues have increased by a factor of ten since that fundraising round in 2020 and that the amount of data transactions has increased by three since the beginning of 2023.
Nova has been rather lean, employing only roughly 100 people. With its additional funds, it does want to increase hiring. It also has ambitions to expand its Credit Passport business internationally, already established in Singapore, Canada, the United Kingdom, and the United Arab Emirates. The business also intends to invest in the Cash Atlas product and create further new goods.
Most of Nova’s current sales come from its Passport product, but Atlas “is growing even more quickly on a percentage basis right now.” Since it was a seed-stage firm, according to Esipov, the company has “heavily” invested in information security and compliance. According to the CEO, the business will become profitable relatively soon, perhaps as early as next year. It chose to raise less money than it did in its last round to minimize “unnecessary dilution,” he continued.
According to Jeffrey Reitman, general partner at Canapi Ventures, he was first drawn to Nova’s aim to enable immigrants and thin-file clients to have equitable access to financial goods. Canapi made its initial investment in the business during the Series B round and has since been impressed by “the explosive growth” it has demonstrated.
“Many of our banking LPs are in active dialogues with Nova Credit to leverage their products to better serve their customers and that also nicely aligns with the mission here at Canapi,” the executive added.
According to Reitman, Nova “has amassed more collective access to international credit data than any of the major credit bureaus, making for a very valuable proposition for its customers.”