Anyone who has filled out a mortgage application is familiar with the eye-glazing stack of paperwork that informs the bank about the current state of your finances. Companies too wrestle with this sort of paperwork, and that’s especially the case with firms that make heavy use of credit, which obliges them to keep track of mounds of financial data on an ongoing basis. For the most part, they do this by passing massive Excel sheets back and forth, a tedious and labor intensive process. One startup, though, thinks it has cracked the code on how to streamline these tasks.
On Tuesday, Austin-based Setpoint announced it has raised a $31 million Series B round, which was led by 645 Ventures and included significant strategic investments from Citi and Wells Fargo. The company’s clients include online car seller Carvana as well as home buying startup Pathway.
Founded in 2021, Setpoint makes software that lets firms update the state of their loans and share the data instantly with banks and other large financial firms that supply them credit facilities. Its tools track a wide variety of ever-shifting variables—including interest rates, FICO scores and so on—in order to help both parties ensure that the company drawing on the credit facility is in compliance with its various terms.
Setpoint’s first customers were in the real estate sector, but it has since expanded to fields like auto credit and a variety of consumer services that offer financing to their customers.
In an interview with Fortune, 645 Ventures partner Jon Smith described the field of loan compliance software as an esoteric one that doesn’t get a lot of attention, but also an enormous one that is ripe for technological disruption. Meanwhile, other fintech startups are building tools to do the same in adjacent fields. These include Finley, which builds software to manage debt capital agreements and Vaas, which does something similar for the Latin American market.
Setpoint co-founder Stuart Wall says the startup is poised to tap into a flywheel effect if it can continue to persuade large financial service providers to adopt the software since those providers are likely to encourage a wide range of their counterparties to use it. To this end, the addition of Citi and Wells Fargo as strategic investors could foreshadow those banks adopting Setpoint in their own business operations.
Wall declined to share the latest valuation for Setpoint or to disclose specific financials, but did say the company pulled in nearly $20 million in revenue last year.
The Series B funding news announced on Tuesday comes after Setpoint raised $43M in 2022 an earlier round led by Andreessen Horowitz, which also participated in the current round. The other participating investors in the Series B are: NextView Ventures, Floating Point, Henry Kravis, Zillow founder’s 75 & Sunny, Vesta Ventures, FifthWall, Eltura Ventures and Outrunner Capital.