Tricolor to Expand Its AI-Powered Credit Vehicle for Underserved Hispanics With $90M in Funds Managed by BlackRock

The Dallas-based certified Community Development Financial Institution plans to accelerate its mission-driven approach to the purchasing and financing of used vehicles for credit invisible Hispanics.

Dallas-based Tricolor Auto Group is getting a big boost to expand its vehicle financing platform with a new $90 million convertible preferred equity investment from funds managed by BlackRock.

The investment, which converts to a minority stake, will be used to accelerate Tricolor’s mission-driven, AI-powered approach to the purchasing and financing of used vehicles for credit-invisible Hispanics.

It will help retailers and service providers more effectively meet the needs of a highly underserved market by offering credit-building auto loans to individuals with no or limited credit history.

Tricolor combines its 14 years of proprietary customer insights with artificial intelligence and more than 22 million non-traditional credit attributes to provide high-quality, affordable vehicle financing nationwide. Its platform is geared toward low-income, underserved Hispanics. According to the company, the more than 59 million Hispanics in the U.S. rank as the eighth-largest economy on earth.

Tricolor CEO Daniel Chu

However, according to statistics provided by the FDIC National Survey of Unbanked and Underbanked Households, 31 percent of the country’s Hispanic population have no or limited access to mainstream credit.

As a U.S. Department of the Treasury certified Community Development Financial Institution, Tricolor fills a prominent need: It has disbursed more than $1.5 billion in affordable auto loans to this community.

“For decades, the deck has been stacked against low income or credit-invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle,” Daniel Chu, founder and CEO of Tricolor, said in a statement. “We’ve proven that our technology and teams can reverse this dynamic, helping people gain access to reliable, affordable transportation.”

Rapid expansion

With the support of BlackRock, the world’s largest asset manager, Chu says Tricolor aims to help even more people improve their lives.

Tricolor will use the capital to bring its affordable financing options into new markets and geographies, as its business currently sits primarily in Texas and California. Additional rollouts are in place for new states in the coming months.

The company also wants to use the investment to scale Tricolor Financial, its SaaS business arm. Launched in February, the venture extended the company’s AI-powered technology through a Software as a Service model, leveraging capability to “score the unscoreable.”

Coinciding with the unit’s announcement was the news that Stephanie Alsbrooks Hanson, founder and former CEO of defi Solutions, a cloud-based solution for originating and servicing consumer loans, had been named Tricolor Financial’s new president.

The veteran industry leader has been working to grow Tricolor Financial in the used vehicle sector and adjacent industries.

[Image: Tricolor]

From here, the company plans to continue building on its mission to empower underserved customers and provide them a path to a better life.

Together with its affiliate, Ganas Auto Group, Tricolor operates 50 retail dealerships across 18 markets, with a combined 85,000 customers served.

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