In 2014, Andrew Graham and Eva Wong co-founded Borowell with the vision to help Canadians make great decisions about credits [1]. The two founders noticed that many Canadians are unable to get loan approval or funding processed in time from the traditional lending system due to its complexity and slow processing. This led individuals with sound credit-card history to make unhealthy financial behaviour of carrying their credit card balances, as a result paying interest at high rates [2]. The two founders aimed to create a lending marketplace platform where Canadians can apply loans easily and be processed at a reduced timeline with individually customized rates [3]. Equitable Bank and Oakwest Corporation funded CAD 5.4M through seed funding to support their vision. Over the years, Borrowell has been funded multiple times with the most recent funding amount of CAD 25M in Feb 2021, totalling accumulated funding to CAD 92M [4].
Over the years, Borrowell has expanded its services with innovation, attracting over 2M Canadian members. Partnering with Canada's largest credit bureau, Equifax, Borrowell offers its members free credit score checks, speedy loan funding processes with low interest rates and education on credit management. Additionally, the company introduced Canada's first personalized credit coach, Molly, powered through Artificial Intelligence (AI) to provide individualized recommendations to build stronger credit scores. They also developed product recommendation engine, listing financial products from their partnering financial institutions that are best suited based on each member's credit profile. The company leverages several technologies for their business such as Impact to find, contract and partner with interested financial instituions, as well as Microsoft Azure for primary storage and deploying and hosting machine learning products [5, 6].
With abundant advancement of technology and its application in the FinTech space, major developments in personal finance/lending sector has been witnessed in the past decade. One of newly observed trends is the rise of commonplaces for digital borrowers. With the rise of Gen Z, who have been familiarized with digital space along with the recent pandemic have forced borrowers to seek non-traditional lending space. This led surged use of AI and Machine learning application in the digital space. Implementation of AI and ML allowed massive data comprehension, offering personalized financial products leading to higher and more accurate approval rates for buyers with lower loss rates for lenders and shorter time to funding [7]. Traditional financial instutions are also digitalizing their businesses, holding a firm position as a leader in personal lending domain whilst rising FinTech companies such as Mogo, Borrowell, and Koho are making impressive strides in the market [8].
The core metrics to measure the success of companies such as Borrowell are membership size, # of visits to its application, credit score improvement records as well as revenue. Borrowell has over 2M members, averaging 1.3M visits per month. This shows how well the company is maintaining service satisfaction to its members. [9], Also, Borrowell has paved a pathway for underserved subprime credit population as 53% of its members have credit score below 659 which is considered Canadian average. The company has proven record of improving credit scores of subprime credit population by approximately 171 points in 24 months. Also, In February 2021, Borrowell acquired Refresh Financials, a company with customer base with average credit score of 500. Borrowell has expanded its customer base and is stabilizing financial stability of these members, resulting to lowering cost of borrowing, better managing budget and increasing their savings [10]. Lastly, the company recorded CAD 2.1M through interest from lending and referral fees from partnering financial institutions when members use the recommended financial products. [11].
Currently, Borrowell competes with well-known FinTech companies such as Mogo, Koho and Credit Karma in many overlapping areas. Koho, a FinTech start-up company that is receiving alot of attention, has started its credit building services [12]. Mogo is a Vancouver-based publicly traded company with over 1.6M members offering Canadians credit score checks, identity theft monitoring, and loans and mortages [13]. Credit Karma, an American company that expanded to Canada offering free credit monitoring and loans are also considered a strong competitor with many overlapping features [14].
According to The Canadian Bankers Association, the financial loss from credit fraud is over CAD 800M and only 19% of those Canadian victims were aware of this [15]. Borrowell could consider expanding its services to credit fraud detection, despite it being a key feature that is already provided by Mogo. This additional service could help Borrowell establish themselves as end-to-end credit building company, from detecting credit fraud, conducting free credit score checks and recommending actions and financial products to improve the credit score. It also aligns well with Borrowell's mission to help Canadians to educate, to make better decisions about credit, and build stronger credit scores. If Borrowell decides to add fraud detection, it must leverage AI and Big Data to protect its members from fradulent activities [16].
[1] https://borrowell.com/who-is-borrowell
[2] https://financialpost.com/financial-post-magazine/how-one-fintech-wants-to-save-consumers-a-lot-of-money-on-their-credit-cards
[3] https://www.youtube.com/watch?v=YjD77npGKX8&t=415s&ab_channel=TechTO
[4] https://www.crunchbase.com/organization/borrowell/company_financials
[5] https://www.zoominfo.com/c/borrowell-inc/368373141
[6] https://www.youtube.com/watch?v=LCWEjasm19U&t=92s&ab_channel=MicrosoftinBusiness
[7] https://www.gdslink.com/5-lending-trends-for-2021/
[8] https://reviewlution.ca/best/personal-loans-canada/
[9] https://www.owler.com/company/borrowell
[10] https://www.theimpactengine.com/bloghome/2021/2/28/borrowell-why-we-invested
[11] https://www.crunchbase.com/organization/borrowell/technology
[12] https://betakit.com/borrowell-raises-25-million-to-fund-acquisition-of-refresh-financial/
[13] https://www.mogo.ca/about-mogo
[14] https://borrowell.com/blog/borrowell-vs-mogo-vs-credit-karma-whats-the-difference#credit-karma
[15] https://www.simplerate.ca/credit-card-fraud-statistics-canada/
[16] https://www.youtube.com/watch?v=pIfDlQt6HPo&t=473s&ab_channel=AmazonWebServices