Fundo Loans founder launches US spin-off Savvy with first credit line secured for gamified fintech

The reason for the name switch-up is because a trademarked Fundo already exists in the US. It should also be noted that the US-incorporated Savvy Loans has no connection to the Australian lending business Quantum Savvy Pty Ltd which trades as 'Savvy'.

Two-time Sydney Young Entrepreneur Award - Finance winner Bishara Hatoum founded Fundo Loans in 2018, growing the business to its most recent monthly run rate of $30 million, underpinned by the gamified Fundo Credit Score that enhances the user experience.

"That score is a leading indicator to the customer to see how they're performing in our eyes," Hatoum tells Business News Australia.

"A lot of the time other lenders just have a black box solution, you never really know. You cross your fingers and hope for the best when you apply for a loan.

"For us, we’ve created a game where the higher your score is the more likely you are to be approved, the lower your score is the more likely you are to be declined."

This means that customers can very easily see what aspects of their behaviour Fundo is assessing from a financial performance perspective, based on how they are performing with existing loans and the quality of their bank statements.

"One of the most important things is making sure that the user experience is so easy and intuitive for customers, so that they don’t have to get lost on a specific page or not know where to navigate," Hatoum explains.

"We’ve really simplified all of that – we’ve got something called three-click apply where a customer in just three clicks can submit their information that they've previously submitted to us."

To date the company has dispersed $175 million worth of loans and is now tracking at around $9 million in loans dispersed per month.

Hatoum says the licence for Savvy Loans was received six months ago, and since then a lean team has been working on the tech integration and studying the market, with an office set now set up in Dallas, Texas and positive initial feedback since a soft launch was kicked off a month ago.

"The hardest part with America is it really felt like I was starting as a business owner from scratch – I really had no idea about their terminology, their banking system, the way that their infrastructure is set up, what hoops I had to jump through to get all my partners and suppliers lined up," he says.

But the strategy was to reach out to as many law firms in Texas as possible to gain a better understanding of what would be necessary, attending trade conferences and setting up meetings. Hatoum notes that the accolades received by the company in Australia made it "a lot easier to form relationships".

"Because of our proven experience with Fundo, so many different people were willing to fund us and partner up. So we've already secured a US$5 million line of credit in Texas with just a personal guarantee," the entrepreneur says.

"We already did a soft launch and we’re doing a hard launch next week with Savvy Loans – that’s when we’ll really see the quality of the customers we’re able to pull."

Hatoum believes the Australian market is quite tech-savvy compared to a lot of places in America, where you tend to see "the best and the worst".

"A lot of the lenders look like they're operating in DOS – really old school operations, we think we’ll be able to run rings around them," he says.

"When we went live with the soft launch about a month ago, without any marketing we started getting calls in the middle of the night of people wanting funding, so we very quickly realised there was a market.

"There is 150 per cent more search volume for our keywords in Texas alone than all of Australia, so it’s a market that’s just really ripe," he says, adding another good reason for expansion into the US is the diversification of compliance risk."

Hatoum says Fundo, which has very high scores on the likes of Google, Facebook and Product Review, will continue to be the "driving force" of the business, while Savvy Loans will effectively replicate the business model with a savvy credit score, addressing a market that's a lot larger.

There will be a few challenges to overcome first, including Spanish translations to cater to the demographics of Texas, as well as a different approach to marketing channels.

"The difference between Australia and the US is we can’t actually rely on Google Ads which has been our main traction channel in Australia," Hatoum clarifies.

"We’ve actually got to rely on third-party lead providers. That’s one key difference in our go-to-market strategy, but at the end of the day our user experience is really what differentiates us and our business is all about retention and return rates.

"We think we can very easily replicate our success in the States. So go to market is going to be lend out a couple of $100,000 just to optimise our machine learning models and see what our credit risk looks like."