Peach Finance (Peach), a modern SaaS-based loan servicing platform, has raised USD20 million in a Series A funding round led by Canapi Ventures with participation from existing and new investors, SciFi VC, Caffeinated Capital, Nyca Partners and Moore Specialty Credit.
The funding will support Peach’s continued expansion within the growing loan management and servicing market, including through new credit product launches, customer growth initiatives and increased hiring.
Peach is the first all-in-one SaaS platform addressing the full range of evolving needs of fintech companies and established financial institutions like banks and credit unions through its loan management, servicing and Compliance Guard™ product offerings. Peach’s third-generation system places an emphasis on maximum configurability and superior borrower and customer service experiences, features that are increasingly demanded by digital lenders and expected by today’s consumers. Peach’s API-first, modular approach gives lenders the flexibility to tailor a solution to fit their exact needs while offering sufficient out-of-the-box functionality. Its software is further designed to help lenders streamline operations, increase borrower satisfaction and intelligently manage regulatory risk. Since its launch in Q4 2020, Peach has become a crucial building block for lending platforms and has enabled both traditional lenders and the next generation of fintech and software companies to build consumer- and business-lending solutions on top of their existing platforms.
“I have seen firsthand the challenges that emerging lenders have commonly faced, and legacy platforms continue to fall short in a few important ways,” says Eddie Oistacher, Peach Chief Executive Officer. “First, they were built around a very specific type of loan, and any deviation from that loan type requires a custom build – making it slow and difficult to launch new credit products and even to implement simple changes. Second, the regulatory landscape has become more complex over time, with an intricate patchwork of federal, state and local laws that legacy systems were never designed to handle. And third, no legacy solution provides all-in-one functionality. Lenders must integrate an array of vendors piecemeal, leading to convoluted integrations, instability and endless bugs. Since legacy platforms were built on mainframes, they don’t fit into today’s cloud-based architecture.
“For both traditional lenders and modern fintechs needing to deliver efficiency and an exceptional customer experience, legacy systems simply aren’t cutting it – and Peach is uniquely able to meet this tremendous, growing market need with our all-in-one SaaS platform. We’re thrilled to have the support of Canapi Ventures and all our investors as we continue our growth trajectory in this important segment of the industry.”
Leveraging Oistacher’s experience building and scaling loan servicing systems at Enova and Affirm to serve millions of customers, Peach was launched with co-founders Gur Brosh and Eran Sandler to fill a clear void in the tech-enabled loan servicing market. Peach is addressing the massive loan management and servicing opportunity in the US driven by USD14.6 trillion in outstanding consumer debt, a number that has grown more than 30 per cent since 2010, and increased demand from fintech and bank customers. Lenders, who spend about 10bps on servicing software annually, have traditionally worked with legacy vendors, some of whose solutions are now more than 30 years old. Peach provides the vital servicing technology that enables emerging and traditional lenders to launch and scale new digital lending initiatives.
“As the race to acquire digital banking customers heats up, we believe both banks and fintechs will look to significantly increase their customer lifetime values, resulting in an explosion of newly created, digitally originated lending products,” says Jeffrey Reitman, Partner at Canapi Ventures. “The legacy servicing solutions that exist today are not able to provide a borrower experience commensurate with how these digital lenders want to interact with their customers – creating significant tailwinds that will fuel Peach’s growth as it builds on its strong momentum and capitalises on the many growth opportunities ahead. Canapi is thrilled to be leading Peach’s Series A, and we look forward to helping banks and fintechs upgrade their customer servicing experience to meet the ever-evolving expectations of today’s consumer.”
Alex Hartz, Partner at SciFi VC, adds: “SciFi is excited to support Peach as they help lenders scale efficiently with their best-in-class loan management system and servicing platform. We believe that Eddie and the team’s direct experience bringing lending products to market uniquely positions them to provide modern lending infrastructure so that lenders can focus on differentiating through underwriting and customer experience.”
Peach saves lenders the burden of integrating up to a half dozen different vendors and shortens time to market from six-12 months to six-eight weeks. The Peach team’s deep understanding of debt servicing has enabled them to develop smooth integrations and an efficient onboarding process. Peach’s customers include leaders in the financial industry, such as Empower, Jetty and ClearGage, and other established lenders who are looking for an enterprise-grade scalable solution, vendor expertise and nimble support.
“As a mobile-first neobank, we were looking for a trusted partner with modern technology that could help us launch innovative lending products quickly – and that’s where Peach came in,” says Warren Hogarth, CEO of Empower. “We were not only impressed by Peach’s flexible technology offering but also their expertise and deep understanding of the complexities of lending and the details that make servicing challenging to address.”
