Numerated, the loan technology company that incubated inside Eastern Bank and spun off on its own in May 2017, has raised $15 million from bank investment fund Patriot Financial Partners. Existing investors Venrock, Fintop Capital and Hyperplane also joined the round.
Patriot Financial Partners is a team of ex-bankers who run private equity funds. They normally invest in community banks and thrifts. Recently the group invested in Grasshopper Bank, a de novo based in New York that serves tech startups.
When Patriot "looked at our platform, they saw a tool that could be crucial for banks like the ones they invest in,” said Numerated CEO Dan O’Malley.
Numerated came up on Patriot's radar in January, when O’Malley gave a presentation at a conference. Jerry Plush, the Patriot partner who led the deal, is now on Numerated’s board.
Numerated applies machine learning and artificial intelligence to data from inside and outside of banks, pre-qualifying businesses for a bank’s products and offering online loans that are processed quickly, in some cases in as little as three minutes. It also analyzes a bank’s transactions to identify relationship expansion opportunities, such as customers with loans, credit cards or treasury management services with competitors. Currently it applies its data science to more than 1.4 billion bank transactions. Karen Mills, former head of the Small Business Administration, and Raj Date, former deputy head of the Consumer Financial Protection Bureau, are both advisers to the company.
Numerated plans to use the new funding to develop new products. One recent new product it came out with is a real-time term sheets software.
“Most banks lose on 80% of the term sheets that they put out because the industry is so competitive,” O’Malley said.
It’s also rolling out a predictive model that can help banks determine which companies are most likely to accept an offer for a loan or deposit.
