Israeli fintech co Pagaya raises $75m debt from Citi

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The Tel Aviv-based company has developed machine learning algorithms and big data analytics to boost profits for institutional investors.

Israeli fintech asset management company Pagaya Investments has raised $75 million in debt financing from Citi Group. The funds will be used to set up Pagaya Opportunities, an online lending platform.

Founded in 2016 by CEO Gal Krubiner, CTO Avital Pardo and VP sales and marketing Yahav Yulzari, the Tel Aviv-based company has developed machine learning algorithms and big data analytics to deliver measurably higher profits for institutional investors across the fixed income and alternative credit spectrum.

Pagaya has raised over $200 million in debt to date, mainly from Israeli institutional investors including 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). Viola Venture and Carmel Ventures invested in Pagaya's very first $5.3 million financing round.

In reporting on Pagaya's latest financing round, "Business Insider" noted that consumer debt increased by 5.5% in the fourth quarter of 2017 from the corresponding quarter of 2016 to $3.82 trillion.

Krubiner told "Globes" "Our mission is to redefine the world of asset management in the debt sector using advanced technology based asset management. In the digital age, the traditional models of asset management are not serving the needs of digital investors. The amount of data available for decision making has grown tenfold because of the data revolution, making traditional money management methods less relevant. In the coming years, we expect to see more and more investment bodies turning to AI advanced technology."

Krubiner does not reveal the size of the fees that financial institutions and investors are charged. He added, "For us the fact that one of the world's leading consumer credit organizations has chosen us to manage its money is an enormous success. The world of digital investments is currently expanding into additional investment options such as vehicle and real estate loans."

Citi consumer finance head Ari Rosenberg said, “This transaction is a great example of the continuing evolution of consumer credit as an asset class and growth opportunity."

Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Big data Photo: Shutterstock
Big data Photo: Shutterstock
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