Stratyfy, a fintech that builds machine learning software solutions to help firms mitigate risk, remove bias and enable inclusive lending, announced $10 million in funding last month.
The round was co-led by Truist Ventures and Zeal Capital Partners and included Mendon Venture Partners, The 98, FIS and serial entrepreneur Barry J. Glick.
"It's an opportunistic raise for us, which may sound almost strange to raise an opportunistic round in such a challenged market environment," Laura Kornhauser, co-founder and CEO of Stratyfy, told Banking Dive. "But we felt it was still the right time to bring in money despite the tough marketing environment so that we can invest in the growth of our team to support the demand that we generate."
Kornhauser said the fintech's present clients and the metrics showing the customers it gained with its tools contributed to the successful fundraising event.
"Our investment in Stratyfy is an opportunity to learn about innovative technologies, commercialize impactful solutions and positively support our communities," Tarun Mehta, head of corporate development at Truist Ventures, said in a statement.
Truist's senior executives and technical experts want to participate in "the development and growth of this mission-driven, disruptive company," he added.
"This funding will help us further invest in a product that we actually launched about a year ago, which we call UnBias," Kornhauser said.
“[UnBias] offers financial institutions a tool for proactive, unfair bias detection. Should an unfair bias be identified, [UnBias] gives them the opportunity and the actionable recommendations to proactively address and negate that bias," she said.
Stratyfy's team is working with customers and lenders who are already using the product to help them get a fair lending risk assessment and help them comply with fair lending regulations, Kornhauser noted.
The New York-based fintech is working on securing integration partners to help financial institutions, namely community and regional banks, roll out the product more seamlessly.
Currently, Stratyfy is focusing more on community banks, though the firm has previously worked with fintech lenders, Kornhauser said.
Kornhauser said some integration partners are already on board, while another group of partners will be joining in the next quarter.
UnBias is the outcome of feedback Stratyfy received from lenders who used the fintech's credit risk assessment tool to evaluate potential borrowers and optimize their credit strategy based on the metric of bias, she said.
"We have always viewed bias as a KPI or key performance indicator of a model, and we've always thought that a lender should look at this indicator when evaluating and selecting which model they want to deploy to help enable their automated decisions," Kornhauser pointed out.
The executive said she wants Stratyfy to work with other types of institutions and be the technology helping customers figure out a way “to open their doors to a wider variety of people [which] is actually not just the right thing to do, but it's also a really smart business decision and it's also a revenue driving decision for them.”
Kornhauser said Stratyfy received positive feedback from lenders who used the tool, as it minimizes reliance on external entities, which can be limiting for lenders.
Stratyfy’s AI or machine learning model is "biased by the decisions and structure of our past," Kornhauser said, adding she wants the tool to ensure that if any unfair bias has impacted a decision, the lender that is using the tool can proactively mitigate the bias.
"My vision is to deliver UnBias to a wider variety of use cases and decisions that matter to people and their lives," she added.
