This article originally appeared on canapi.com/insights.

Immigrants are a vibrant part of today’s economy and play a significant role in fostering innovation globally. In fact, more than 40% of Fortune 500 companies and more than 50% of $1B+ startups were founded by first-generation immigrants or their children.

Unfortunately, many newcomers face a common barrier that many of us take for granted – access to basic financial products, cell phones or utilities. At its core, the issue is a data problem. In a world where automated credit scoring systems like those developed by FICO have become a fundamental determinant of financial success, these newcomers can be locked out.

Even if someone has a deep credit profile and significant wealth in their home market, the data is not easily transferrable to new financial institutions. The lack of a country-specific credit score is crippling. Based on our estimates, there are roughly 10M people in the US that fit this profile from the past 5 years alone. But the problem isn’t confined to the US alone – it’s global.

A mission-driven team

We first met Misha and Nicky four years ago as they were finishing their MBAs at Stanford GSB. As immigrants themselves, the problem outlined above was personal. Like many before them, both founders faced limited financial access and credit options upon migrating to the United States – so they resolved to fix it.

Over the years Nova Credit’s team has impressed us time and time again. Not only are they laser-focused on building quality products and brilliant enterprise salespeople, but they lead with mission and purpose. As builders and operators, ourselves, we understand how critical it is to hire exceptional people. Misha and Nicky have built a deeply talented organization that shares a common vision of building a financial world without borders. Today, roughly 70% of the team is composed of either first- or second-generation immigrants.

A ground-breaking product

The team at Nova Credit has come up with an elegant solution to solve the global data problem. Unlike other alternative data providers, Nova is not innovating on the credit score as an input to underwriting, but rather on its portability. The company’s flagship product is the Credit Passport®, which standardizes, translates, and structures an individual’s raw credit data. Like an identity, Nova Credit believes that financial history should travel with someone when they move from Country A to Country B – so does Canapi…and incumbent financial institutions are starting to actively adopt Nova Credit’s solution.

In 2019, Nova Credit launched a first-of-its-kind partnership with American Express that offers prospective Card Members the ability to share their international credit data with American Express when applying for any AmEx Personal Card. Through Nova Credit, these consumers are five times as likely to be approved for a card than they would have been using traditional underwriting solutions. The validation from the AmEx partnership just scratches the tip of iceberg as it relates to immigrant and thin-file credit underwriting. We believe Nova Credit is an industry-defining business that will play a critical role in the globalization of financial services.

To learn more about Nova Credit and other Canapi portfolio companies, visit our website.
 
About Canapi Ventures

Canapi Ventures is a venture capital firm investing in early to growth-stage fintech companies. Our partners have been at the forefront of financial services innovation as operators, investors, bankers, advisors, and regulators. Our venture capital model connects high-quality fintech companies to our extensive network of banks and strategic partners. Canapi Ventures is advised by Centerharbor Canapi Ventures Investment Advisors, LLC and Canapi Advisors, LLC, a wholly owned subsidiary of Live Oak Bancshares, Inc. (Nasdaq: LOB). For more information, visit www.canapi.com.


Neil Underwood currently serves as Partner of Canapi Ventures, a strategic fintech venture fund, and as President of Live Oak Bancshares (LOB), the holding company of Live Oak Bank. While at the bank, he co-founded nCino (NCNO), a cloud-based bank operating system now serving over 1000 financial institutions globally. 

Through the venture arm of Live Oak, Underwood helped incubate companies focused on digital bank transformation, including Finxact, Payrailz, DefenseStorm and Greenlight. In 2017, he co-founded Apiture, a joint venture between Live Oak and First Data, serving as a cloud-native omni-channel onboarding and servicing platform. 

Prior to Live Oak, Underwood served as General Manager of S1 Corporation (SONE), where he was responsible for the S1 Enterprise Retail division. S1, since acquired by ACI (ACIW), built and deployed financial services systems such as online banking, payments and mobile solutions to over 3,000 financial institutions worldwide.

Underwood currently serves on the board of Live Oak Bank, Greenlight, Notarize, Defense Storm, Apiture, Payrailz, and is board observer at Blend and Finxact. A native of Miami, FL, he holds a Bachelor's Degree of Science in Industrial Engineering from the Georgia Institute of Technology.