Israeli fintech company Pagaya today announced a $14 million Series B financing round co-led by venture capital fund OAK HC/FT and Harvey Golub, former chairman and CEO of American Express with the participation of GF Investments (a New York-based family office), Siam Commercial Bank (one of the largest banks in Thailand, through Digital Ventures), Clal Insurance Ltd. and Pagaya’s seed investor, Viola Ventures. As part of the investment, Golub will join the company's board as well as Dan Petrozzo, Venture Partner at Oak HC/FT.
Founded in 2016 in Tel Aviv by Yahav Yulzari, Avital Pardo and CEO Gal Krubiner, Pagaya has opened investment markets for institutional investors with its AI-based asset management. Pagaya manages $250 million in capital and has raised over $200 million in debt to date, mainly from Israeli institutional investors including Citi, Meitav Dash, The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), Excellence Investments Ltd. (TASE: EXCE), Clal Insurance, Bank Leumi (TASE: LUMI), Bank Hapoalim (TASE: POLI) and Union Bank of Israel (TASE: UNON).
The latest investment will be used for Pagaya’s scalable, tech-driven approach to asset management and will help further the development of its proprietary algorithm to enter new data-rich asset classes. Pagaya will also use the funding to grow its 20-person-strong investment team of high-caliber data scientists and AI specialists, build a global sales force and launch new investment strategies in the coming year.
Krubiner said, “The investment validates the strength of Pagaya’s technology, and it’s an honor to work with investors and bring on new board members who believe in our long-term vision,” said Krubiner. “We can’t wait to put this funding to work and continue to reshape how technology is used in asset management.”
With its technology, Pagaya manages institutional money by investing in market opportunities previously inaccessible to the asset management industry. The company has a diverse client base that spans banks, insurance companies, pension funds, asset managers and high net worth investors.
Petrozzo said, “AI will be a massive part of institutional finance in the future, and the top-notch team at Pagaya has developed the most advanced approach to implementing AI in investment management."
Pagaya’s algorithm analyzes millions of data points to assess risk in different financial instruments, identify emerging alternative asset classes and generate an excess return in those sectors (such as the multitrillion-dollar consumer credit lending market) for institutional investors.
“Even today with an increase in the use of technology in underwriting, there’s a gap between institutions and good borrowers which limits consumer access to the right capital. Pagaya is closing that gap with their AI,” said Golub. “I’m thrilled to join them as they modernize our global financial ecosystem.”
“We backed the Pagaya team since the company’s inception because we are tremendous believers in the way they’re disrupting the asset management industry,” said Avi Zeevi, the Founding General Partner of Viola Ventures and Pagaya’s Chairman. “We’re honored to be joined by such marquee investors to continue supporting the Pagaya team and their growth.”
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2018
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