The London fintech using Open Banking to offer credit to immigrants and young people with thin credit files, raising 10 million pounds before shutting down in 2023
Evaluating only Koyo’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
FUNDING
CRISIS
SHUTDOWN
Full Analysis
Free · no account needed
Documented cause
Koyo built a credit platform using Open Banking transaction data to underwrite loans for people with thin or no UK credit histories — recent immigrants, young adults, and people who had been rejected by traditional credit scoring. They raised 10 million pounds and demonstrated that transaction-based underwriting could identify creditworthy borrowers that traditional bureau scores missed. The product addressed a genuine fairness gap in UK consumer credit. But scaling a credit business requires significant balance sheet capital, and in the 2022-2023 rising-rate environment, the cost of funding loans increased while their thin-file customers faced higher economic stress. Koyo shut down in 2023 after failing to close a growth round.
Lesson
“Open Banking underwriting is a genuine innovation — but innovation in credit risk does not remove the balance sheet requirement to fund the loans at scale.”