An early-stage AI startup that says it can simplify the challenges of risk decision making and portfolio management for complex credit products has raised $7.5 million in seed financing.
Unusual Ventures led the seed round, which included investment from Boston Seed, Argon Ventures and Impellent Ventures.
The Boston-based startup, EnFi Inc., was co-founded by Josh Summers and Scott Weller, two Boston-based serial entrepreneurs and angel investors whose previous startups have been acquired by Paypal, MasterCard, and AT&T.
With the $7 million from the seed round, EnFi is looking to expand its current team of 12 people. The co-founders said they are hopeful that if EnFi can hit all of its metrics, they can reach 30 to 35 people by next year.
Summers and Weller are also looking to use the capital to find “design partners,” as the co-founders call them. Partners help the company think through problems and product challenges.
“A lot of our capital is going towards just making sure we get the right product in place but also starting to get our name out there and attending the right events,” said Summers.
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Beginning July 1, EnFi is launching a closed beta for some of its design partners. According to the co-founders, the beta is where EnFi can receive feedback on the program and “stress test” it. According to Weller, there’s currently a queue of companies looking to join the beta. The first beta will only consist of four to five companies, but EnFi is planning to launch another one at the end of the year.
Summers and Weller had the idea for EnFi after Silicon Valley Bank collapsed in 2023. Companies with which they were friendly began asking them for financial assistance, and while trying to provide financial support to some of these companies, Summers and Weller ran into a series of problems. After interviewing four dozen banking institutions, according to Summer and Weller, the two formed a thesis around risk evaluation.
“How do we help knowledge workers get to decisions faster, creating a better borrower experience? But also, how do we help them continuously monitor those risks?” said Summers, “The entire reason why we created EnFi was to open their understanding of risk across their portfolio, both in the underwriting and in the along the edges.”
AI for portfolio managers
EnFi revolves around making portfolio managers' lives easier. Once it’s up and running, according to Weller, EnFi will convert a process that currently takes a couple of hours into one that will take as little as four minutes.
The process behind it is AI integration. Upon arrival, EnFi can scan hundreds of data files, test the data in those files, and spread the information into its models. Once the portfolio manager arrives to work, all they’ll have to do is approve. According to Summers and Weller, risk analysts spend 10 to 20% of their time assessing risk, and the other 80 to 90% do all the mundane tasks to get to the assessments.
The co-founders believe that with the time saved, agencies can scale their portfolios without scaling their teams.
“We're not launching an MVP (minimum viable product); we're launching a simple, usable, lovable product,” said Weller. “Because our customers are on the front lines, and they're not necessarily super technically savvy, but they can see the value of AI.”
