Inclusive lending fintech Stratyfy raises $10M

Stratyfy, a fintech that builds machine learning software solutions to help businesses reduce risk, remove bias and enable inclusive lending, announced $10 million in funding last month.

The round was led by Truist Ventures and Zeal Capital Partners and included Mendon Venture Partners, The 98, FIS and serial entrepreneur Barry J. Glick.

“It’s an opportunistic raise for us, which may sound almost strange to make an opportunistic round in such a challenged market environment,” Laura Kornhauser, co-founder and CEO of Stratyfy, told Banking Dive. “But we felt it was still the right time to raise money despite the tough marketing environment, so we can invest in the growth of our team to support the demand we’re generating.”

Kornhauser so fintech’s presenting customers and the metrics showing the customers it gained with the tools contributed to the successful fundraising event.

“Our investment in Stratyfy is an opportunity to learn about innovative technologies, commercialize effective solutions and positively support our communities,” Tarun Mehta, head of corporate development at Truist Ventures, said in a statement.

Truist’s senior executives and technical experts want to participate in the “development and growth of this mission-driven, disruptive company,” he added.

“This funding will help us further invest in a product that we actually launched about a year ago, which we call UnBias,” Kornhauser said.

“[UnBias] offers financial institutions a tool for proactive, unfair bias. Should an unfair bias be identified, [UnBias] gives them the opportunity and the practical recommendations to proactively address and debunk this bias,” she said.

Stratyfy’s team works with customers and lenders who already use the product to help them get a fair lending risk assessment and help them comply with fair lending regulations, Kornhauser noted.

The New York-based fintech is working to secure integration partners to help financial institutions, namely community and regional banks, roll out the product more seamlessly.

Currently, Stratyfy is focusing more on community banks, although the firm has previously worked with fintech lenders, Kornhauser so.

Kornhauser said some integration partners are already on board, while another group of partners will join next quarter.

UnBias is result of feedback Stratyfy received from lenders who used the fintech’s credit risk assessment tool to evaluate potential borrowers and optimize their credit strategy based on the skewness metric, she said.

“We’ve always looked at bias as a KPI or key performance indicator for a model, and we’ve always thought that a lender should look at this indicator when they’re evaluating and choosing which model to use to help enable their automated decision making, ” Kornhauser pointed out.

The manager said she will Stratify to work with other types of institutions and be the technology that helps clients find a way “to open the doors to a wider range of people [which] is actually not only the right thing to do, but it’s also a very smart business decision and it’s also a revenue-driving decision for them.”

Kornhauser said Stratyfy received positive feedback from lenders who used the tool, as it minimizes reliance on external devices, which can be limiting for lenders.

Stratyfy’s AI or machine learning model is “biased by the decisions and structure of our past,” Kornhauser said and added she wants the tool to ensure that if unfair bias has influenced a decision, the lender using the tool can proactively reduce the bias.

“My vision is to deliver UnBias to a wider range of use cases and decisions that matter to people and their lives,” she added.