Fintech startup Aura secures $10 million investment led by Prudential Financial to provide affordable loans to more people
Aura, a fintech startup that provides affordable, credit-building loans to America’s working families, has raised a $10 million investment funding to scale and provide more loans to more borrowers. The latest round was led by Prudential Financial. To date, Aura has raised a total of $100 million in equity funding. In total, Aura has raised over $403 million in social bonds across 21 bond issuances.
Aura was founded in 2012 by James Gutierrez, Kevin Kang, and Randy Wong. Aura is a fintech startup and Community Development Financial Institution (CDFI) that provides small, affordable loans to working families in America. Our mission is to build financially healthy low-income communities, by providing empowering financial services to America’s 66-million underbanked and unbanked. All three founders helped create and scale Oportun, a CDFI and one of Time Magazine’s Top 50 Most Genius Companies in 2018.
Currently available in nearly 1,200 locations across California, Texas, Illinois and Arizona, Aura has provided hundreds of thousands of credit-building, responsible loans to low-income households since launching in 2014. Aura has pioneered a cloud-based lending technology that enables trusted local businesses to submit credit applications for centralized review and approval by its proprietary scoring algorithms.
This new funding comes at a time of rapid growth for Aura, in which the company has provided approximately $500 million in loans to more than 350,000 borrowers at over 1,200 partner locations since its founding in 2014. Aura uses technology that goes beyond the credit score to determine borrowers’ ability to repay and enables local businesses to administer credit applications.
“At Aura, we harness data to provide affordable loans to borrowers with low or no credit,” said James Gutierrez, CEO of Aura. “As borrowers pay back their loans, they build credit, which makes it easier to achieve their dreams. Prudential’s investment will help Aura scale and enable us to make more affordable loans to more families.”
Prudential has been a pioneer in impact investing and is building a $1 billion portfolio of investments that delivers both financial returns and meaningful social impact.
“Aura’s accessible, responsible alternative to payday lending is directly aligned with Prudential’s mission to make lives better by solving the financial challenges of a changing world,” said Gerald Pambo-Awich, Director of Strategic Initiatives & Impact Investments at Prudential. “Our investment in Aura will help further accelerate our ongoing work to increase access to capital among those who might otherwise go without it and put more individuals and families on the path to financial wellness.”
Millions of working families in America lack access to safe and affordable loans and are vulnerable to predatory lenders. Working with financial institutions like Prudential, Aura is able to provide borrowers with affordable loans that have saved them hundreds of millions of dollars in additional fees and interest by avoiding predatory options. Two-thirds of Aura’s borrowers have grown their credit score by an average of 285 points from their first to second loan.
Aura loans are made possible by its innovative social bonds program, which enables banks and other financial institutions to invest in loans to low-income individuals, while generating compelling returns.