Alternative credit data provider FactorTrust on Tuesday closed on a $42 million investment led by ABS Capital Partners, a late-stage growth company investor, and MissionOG, an early to growth stage investor.
With the investment, FactorTrust insisted the company will accelerate its growth and expand its suite of offerings to enable lenders to drive desired business results in a challenging compliance environment.
Helping to lead that charge is Michael Heller, who joined FactorTrust on Tuesday as president.
Founded nine years ago, FactorTrust provides solutions that utilize rich, proprietary data not available from traditional credit bureaus, and are driven by a strong technology platform and best-in-class predictive analytics.
The company continues to see tremendous demand for its products as they enable lenders to more accurately assess credit risk for non-prime and underbanked consumers, while also providing consumers with the credit options they seek and deserve.
Executives highlighted ABS Capital Partners and MissionOG bring deep industry expertise and understand the increased need for the type of data and scores provided by FactorTrust. After reviewing a number of companies in the alternative data landscape, they selected FactorTrust because of its significant potential for growth and expansion.
Heller, MissionOG adviser and former president and co-founder of Argus Information and Advisory Services-acquired by Verisk Analytics in 2012, will join FactorTrust as the company’s president and will serve on the board.
“FactorTrust has tremendous potential for further growth, including by broadening the industries we serve beyond short-term and installment lenders and by expanding our focus beyond underwriting data services, both of which could be accelerated by acquisitions,” Heller said.
Heller has more than 25 years of leadership experience in providing information services and analytics to the payments, lending and banking industries.
“We are well-positioned to continue making a significant impact on the underbanked industry and are excited to have Michael Heller as President during this new phase of growth,” FactorTrust chief executive officer Greg Rable said.
With the investment, ABS Capital Partners managing general partner, Phil Clough, will join FactorTrust’s board of directors.
“We ultimately chose FactorTrust because we perceived their data and analytics as the most differentiated and useful in the alternative credit space,” Clough said.
“The underbanked industry is constantly evolving, and we felt FactorTrust was innovative and the best equipped to manage and benefit from the rapid rate of change,” he continued.
Gene Lockhart, chairman and managing partner of MissionOG, will also join as FactorTrust’s board chair.
Lockhart has served in a variety of senior positions including president and CEO of MasterCard International, CEO of Midland Bank PLC, president of the Global Retail Bank for Bank of America and chaired or served on the board of numerous companies, including NetSpend, Progressive Finance and Metro Bank.
Lockhart was also chairman of Argus where he and Heller developed the proprietary data sets and charted overseas expansion.
“FactorTrust operates one of the largest proprietary databases in the underbanked industry with a robust dataset, a strong technology platform, and a loyal and growing base of customers,” Lockhart said.
During the past two years, FactorTrust highlighted that it has experienced tremendous growth.
With more than 200 million loan transaction records, the company’s proprietary credit risk and consumer data is also growing at an impressive rate. FactorTrust is adding more than 350,000 new unique consumers per month to the database, while revenues have more than doubled year-over-year.
“Powered by this investment, along with the knowledge and relationships of the entire ABS Capital and MissionOG teams, including Heller and Lockhart, we are in the best position to scale the success of our FactorTrust data and analytics infrastructure to create innovative solutions that meet the industry’s rising needs within the lending landscape,” Rable said.