Finance
An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investors
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- Tricolor offers auto loans to underbanked Hispanic borrowers.
- It is a community development financial institution that uses AI to underwrite its customers.
- Tricolor used this 25-page pitch deck to score $90 million from BlackRock-managed funds.
An alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds.
Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income.
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Half of Tricolor’s customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.
A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households.
“For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle,” Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.
Since its inception in 2007, Tricolor has originated more than 75,000 auto loans worth $1.5 billion.
The $90 million equity investment was announced Sept. 9 and builds on Tricolor’s previous funding that has come from auto-asset backed securities deals and other equity investors.
With the funds, the auto lender is expecting to expand nationally, beyond California, Nevada and Texas. The new capital will also be used to grow its new software-as-a-service venture, launched in February, that licenses the firm’s AI underwriting tech to third parties.
Here is the 25-page pitch deck Tricolor used to raise the funds.
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