Financial data analytics firm Lumos Technologies Inc. has secured a new infusion of capital to fuel its next growth spurt.
 
The Wilmington-based financial technology company announced Wednesday that its newest seed funding round totaled $2 million. The money will be used to “expand market presence and accelerate product development,” according to a news release.
 
Lumos, launched in 2022 by a team of former Live Oak Bank employees, provides small business lenders with tools to help them increase their lending efficiency and gauge the credit risk of potential borrowers. While it has done extensive research on SBA lending, Lumos’ products give clients “strategic benefits within (all) small business lending,” the firm’s co-founder and CEO Brett Caines said Wednesday.
 
Its flagship product, the Lumos PRIME+ scoring model, “improves underwriting efficiency and provides a more accurate and fairer risk assessment for small business loans less than $500 thousand,” according to the Lumos website.
 
"In a consumer-focused environment, financial institutions often lack access to products devoted to small business lending. Lumos is changing this," Caines added, noting that Lumos products can be especially helpful to institutions making loans of less than $500,000. “Our data should help a bank understand the credit risk of a small business.”
 
Over the past several months, Lumos has mined SBA lending data to equip lenders in making decisions. The company has explored such details as SBA loan default rates by county, unemployment rates within industries and franchise lending by loan purpose.  
 
Lumos’ newest seed round included one investor very familiar with the young fintech and its team: James “Chip” Mahan, chairman and CEO of Live Oak Bank.

"Lumos has identified and captured a market opportunity for data insights and credit risk modeling with cutting-edge technology. I couldn't be more excited to participate in this seed funding round for Lumos,” Mahan said in the release. “The access to information has altered the landscape of small business lending.”

Lumos now has more than 80 clients that use one or more of its products. Lumos will use the new capital to ramp up its marketing and accelerate product development.

"Our pre-seed funding by Summit Technology Group in 2022 made possible the development of our flagship product, Lumos Prime+ for credit risk scoring, the expansion of our extraordinarily talented pool of Lumineers and the onboarding over 80 financial institutions over the past two years," Youri Nelson, co-founder and CTO of Lumos, said in the release. "This new capital injection allows us to build upon that base and further live our mission."