BURBANK, Calif.– Zest AI, a provider of AI-powered lending solutions, said it has completed an oversubscribed, customer-led financing round that was led by five of the company’s key customers: SchoolsFirst Federal Credit Union, Members 1st Federal Credit Union, ORNL Federal Credit Union, Truliant Federal Credit Union, and Citi, through its investing group Citi Ventures.
“The financing represents a significant valuation increase from Zest AI’s previous growth round, reflecting the company’s strong momentum as more financial institutions evolve legacy underwriting systems with AI-driven solutions,” the company said in a statement. “The new capital will power the expansion of Zest AI’s automation initiatives across the full borrower journey and drive wider implementation of its Generative AI-powered lending intelligence platform, LuLu.”
Zest AI said it is benefiting from unprecedented demand for AI-enabled capabilities in financial services, as lenders increasingly embrace artificial intelligence to improve underwriting accuracy, expand access to credit, streamline operations, and drive growth.
Doubling of Approvals
“Our instant approval rate has more than doubled. Institutionalizing Zest AI’s technology across our lending operations has been game-changing for our member experience and our business results,” Bill Cheney, CEO at SchoolsFirst FCU, said in a statement. “When we signed on a year ago, we had an ambitious vision, and the results have exceeded our expectations. This is a partnership that’s delivering real value today and will continue to drive innovation for our members well into the future.”
Zest AI said it now has more than 50 issued and pending patents and over 650 proprietary credit models, and that its technology is used by nearly 300 lenders – from credit unions and community banks to large enterprise financial institutions – with solutions spanning automated underwriting, LuLu lending intelligence platform, and Zest Protect for fraud detection.
The company said its machine learning models deliver significantly greater accuracy than legacy credit scores, enabling lenders to achieve, on average, a 25% increase in approvals with no added risk and reduce defaults by 20%, while holding approvals constant.
‘Ultimate Validation’
“Having our customers become investors is the ultimate validation of our technology and vision,” Zest AI CEO Mike de Vere said in a statement. “This round reflects both financial and operational confidence from institutions that use our AI solutions every day to transform their businesses and deliver greater value to their customers and members. The convergence of regulatory support for AI, intensifying competition, and the need for efficiency is fueling strong demand for our solutions. This investment enables us to accelerate innovation and scale adoption, helping more financial institutions leverage AI to deliver greater impact for the communities they serve.”
