Lendbuzz, a Boston-based fintech that provides auto loans to consumers with limited credit history, is preparing for a Nasdaq IPO.

The company has signed with several underwriters and is expected to submit its prospectus soon, with the IPO potentially valuing Lendbuzz between US$1 billion and US$1.5 billion.

Lendbuzz most recently raised US$345 million—US$45 million in equity at a US$1.1 billion valuation and US$300 million in debt—in a round led by US insurer Group 1001.

Since its founding in 2015 by Amitay Kalmar and Dan Raviv, Lendbuzz has raised US$200 million in equity and US$2 billion in debt.

The company employs 500 people, including 50 in Israel.

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🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Fintech lenders require fundamentally different capital structures than typical tech startups

Lendbuzz’s funding illustrates how lending companies must raise capital differently from software startups.

The company has raised $2 billion in debt financing compared to only $200 million in equity since its 2015 founding1. This 10-to-1 debt ratio reflects the reality that lending companies need massive amounts of capital to originate loans, not just build technology.

Traditional venture-backed software companies typically raise primarily equity because their main costs are people and infrastructure. But Lendbuzz needs billions in loan capital to serve customers, requiring partnerships with major financial institutions like JP Morgan, which provided multiple credit facilities2.

This capital structure explains why Lendbuzz’s recent $345 million round included $300 million in debt and only $45 million in equity1. The company essentially operates two businesses: a technology platform that requires equity investment, and a lending operation that requires debt financing to function.

2️⃣ Alternative credit assessment creates substantial market opportunities in underserved demographics

Lendbuzz’s growth demonstrates the business potential in serving consumers overlooked by traditional lenders.

The company reported 200% year-over-year growth in loan origination by early 20213, while targeting the estimated 45 million Americans who lack access to traditional credit3. This includes foreign nationals relocating to the U.S., who often have strong financial profiles but no domestic credit history4.

The company’s expansion from 100 to 500 employees and partnerships with over 300 dealerships nationwide14 shows how quickly alternative lending can scale when addressing genuine market gaps.

By using machine learning to evaluate factors like education, employment history, and spending patterns rather than traditional credit scores45, Lendbuzz accesses a customer base that banks typically cannot serve profitably, creating a defendable market position in an underserved segment.

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