Dallas-based fintech Yendo has raised $165 million in debt and equity to expand its platform, which offers credit secured by car equity.

The company announced the closing of $150 million in debt financing led by the i80 Group and $15 million in equity funding from undisclosed strategic investors. The capital will be used to fuel customer growth, introduce new products, and expedite its offerings to all 50 states.

Yendo, which touts the first-ever vehicle-secured credit card, said the funds would enable it to extend credit to more Americans at affordable rates. The fintech startup, launched in 2021, allows people to borrow against the equity in their vehicles. Dallas billionaire investor Mark Cuban backed Yendo (formerly Otto) through its seed and Series A funding rounds as the company set out to disrupt subprime lending with more affordable vehicle-secured credit products.

The fintech startup, launched in 2021, allows people to borrow against the equity in their vehicles. Dallas billionaire investor Mark Cuban backed Yendo (formerly Otto) through its seed and Series A funding rounds as the company set out to disrupt subprime lending with more affordable vehicle-secured credit products.

In 2022, the company (then Otto) raised a $4.5 million seed round led by Uncommon. Last year, the company raised a $24 million Series A funding round led by FPV Ventures, and grew its business by over 700%.

“We’ve proven there’s a need for a product like Yendo in the market and this round of debt financing from i80 Group will enable us to expand access to affordable credit to more Americans in more geographies,” Yendo CEO and Co-Founder Jordan Miller said in a statement.

Miller said the startup has “an aggressive roadmap for 2024,” adding that the “credit facility will allow us to deliver on our mission and focus on what matters most — delivering the best products and experiences to our customers.”

Credit card alternative for underserved consumers

Yendo said it provides a vehicle-secured credit card with prime rates to millions of Americans who have historically lacked access to the financial system because of their credit score.

Via Yendo, underserved consumers can tap into the equity of their car to gain access to up to $10,000 of revolving credit at interest rates comparable to unsecured super-prime credit cards.

Yendo said the card also is available to customers who do not yet own their vehicle but choose to refinance their auto loan through Yendo. The company said that as customers pay down their auto loans each month their Yendo credit card availability increases proportionally.

The company said that fills a gap in the market by giving consumers, who otherwise might not be approved for credit, the opportunity to leverage one of their most valuable assets to enter the financial system and start building their credit.

Funding and ‘win-win’ product

According to the startup, the financing closed at a time when banks have continued to tighten their belts on lending. Citing PitchBook, Yendo said debt deal volume to venture-backed companies in 2023 was down nearly 37% from the year before, making it the slowest lending year since 2017.

Peter Frank, managing director at i80 Group, said the firm is “thrilled to partner with Yendo,” adding that the company addresses “an overlooked segment of consumer credit with an innovative product.”

“[Miller] and the Yendo team have developed a unique offering that creates a win–win, we’re excited to partner with them to scale it,” he said in a statement.

To date, Yendo said it has saved its customers more than $50 million in interest and fees compared to alternative lending products. Yendo is available in 40 states.

The company was founded in 2021 by Miller, George Utkov, and Daniel Ashy.

Quincy Preston contributed to this report.

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