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The new fintech generation: don’t fight the banks, embrace them

Akouba Credit is a software company muscling in the fintech sector by providing a complete platform for the traditional brick and mortar banks to take their process online.

The early pioneers in fintech lending have all focussed on “bankless” lending. LC, Prosper, FundingCircle, OnDeck etc are all direct competitors of banks. Their technologies and proprietary algorithms have revolutionized the borrower experience, eliminating hassles and moving the entire credit appraisal process online.


A major catch-22 for these marketplace lenders is that their cost of capital is much higher versus the banks. Hedge funds, insurers, family offices are betting on the online lending segment only due to the high yields available. However, the marketplace lenders have to offer to borrowers a rate that is competitive enough. They are therefore stuck between a rock and a hard place.

In terms of cost of capital, fintechs are still not competitive against banks community lenders and credit unions.  So the only weapon in the arsenal is the fintech arsenal is their technology & algorithms, which allow them to shift the processing online and reduce the time taken for a decision from weeks to days. But is this technology not replicable?

Just technology

Enter Lending-as-a-Service. Chicago-based Akouba Credit was launched in July 2015 to leverage this shift in banking technology and help traditional banks and credit unions in creating an online lending mechanism. The company was founded by Chris Retner(CEO), Evan Hareras(COO) and Nick McMillan(CTO) in 2014.

The company defines itself as a provider of “a secure cloud-based platform that reduces the cost and time required to issue a small business loan, while retaining complete control over the customer relationship, customer experience and the loan dollars. The platform configured to each lender’s underwriting principles, allows small businesses to apply and track their application electronically, with results delivered within 48 hours.”

It took the team almost 18 months to build the entire platform and achieve the security clearances/certifications required for working with a bank. The company has raised $118,000 in convertible notes from Right Side Capital Management and TechStars.

Akouba vs marketplace lenders

The founders had actually planned to start a marketplace lender. While doing their research on customer acquisition costs, they found that it was better to tie up with banks and buy their denials versus burning cash on Google keywords and Facebook. In discussion with banks, they found out that banks have a very low cost of funds due to their massive deposit base. Moreover, they wanted to use the start-up’s software to quicken the loan process and shift it online to a meaningful extent. So the company took a fateful pivot and transformed itself into a lending-as-a-service provider. Currently, its software is live with a small-business lending tool and it specifically focuses on business loans under $500,000. The company was able to get Metropolitan Capital Bank on board as its first customer. It has added its second and third client in Q2 and Q3 and projects to finish the year with around 10 clients. The biggest win from this arrangement is that the customer acquisition cost is almost negligible for the banks because they are marketing their credit products to their own customer base.

Akouba is also entering into strategic partnerships to enhance its distribution network. The company has tied up with DH for distribution by bundling Akouba Credit with their LaserPro software. This association was a big validation for the company as it was selected over competitors for its tech and marketing integration features. The young start-up is also finalizing a relationship with FIS, a Fortune 500 company and world’s largest provider of core processing, card issuer and transaction processing services to financial institutions and businesses. The company’s revenue model is similar to a typical SaaS platform; it charges the banks a monthly subscription fee depending upon the transaction volume.


Lending Club’s valuation before and shortly after the IPO has been hotly debated. Some people argue that Lending Club being valued at 20x – 40x revenue was due to it being a technology company. For example, financial companies like major world-wide banks, tend to be valued at a P/E ratio of 8 to 10. As a pure technology company, Akouba’s valuation will likely be using revenue metrics which are highly sought after by all entrepreneurs.

There are 6000 community banks and 5000 credit unions in the US

The software system developed by Akouba does end-to-end processing of the loan application. It supplements the workflow needed at the bank for underwriting and decision-making. The firm does not cater to servicing the loan through its lifecycle or handling defaults as it believes that banks already have the system to take care of these needs. Akouba is not trying to take over the entire software system of an organization; it has created a cloud lending solution that can take the customer through the loan process digitally and then integrate the results with the existing core system of the banks. The company aims to achieve a client base of 100 banks within the next 3 years. There are over 6000 community banks and 5000 credit unions in the United States. The SME loan vertical is worth $180 Bil. This translates into a massive market for the company to tap into. If a narrow view of the existing operations were taken i.e. banks utilizing technology for business lending purposes, that itself is a $16.8 Bil a year market.


Akouba is one of the early companies in LaaS (Lending-as-a-Service) segment. It has already shown proof of concept by getting on board 3 clients and entering into distribution partnerships with DH and FIS. The company’s founders are proud to be a pure tech company and have no intention to foray into direct lending. The company will have the same margins as a Lending Club, without the stress of customer acquisition (which can run up to $400 a borrower) or the regulatory headaches. Though the VC world has poured billions of dollars into marketplace lending, it seems that banks are sooner or later going to catch up with the technology divide. It is more than probable that the next set of unicorns in fintech is going to be from the LaaS platforms as compared to their more illustrious cousins- the lenders. Akouba, with its focus on core lending process and strategic location of Chicago (highest concentration of community banks in the country), is a good bet for VCs who are tired of receiving monthly reports of cash burns from their p2p investments.


Heena Dhir and George Popescu

George Popescu
George Popescu



About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

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