Overview

Theorem Marketplace Lending specializes in investing in loans from online lenders by using data science and machine learning. The company analyzes large datasets with algorithms to identify loans that are likely to be repaid, focusing on marketplace lending, which is different from traditional bank loans. By combining quantitative data with credit insights, Theorem aims to make accurate credit pricing decisions. Their strategy is to generate strong returns for investors by selecting loans with lower default risks, such as wedding loans, which have a higher repayment likelihood compared to business loans. Theorem manages investment funds for various clients, including endowments and insurance companies, and earns revenue through management and performance fees based on investment returns. Theorem's goal is to provide reliable returns across different economic conditions while minimizing risks for its investors.

Simplify's Take

What believers are saying

• Increased interest in alternative lending platforms offers expansion opportunities for Theorem.
• Growing demand for AI-driven investment strategies aligns with Theorem's approach.
• The rise of DeFi platforms could offer new innovative lending opportunities for Theorem.

What critics are saying

• Increased competition from Pagaya Technologies may lead to strategic shifts.
• Rapid AUM growth may strain Theorem's operational capabilities and risk management.
• Reliance on machine learning exposes Theorem to risks of algorithmic biases or errors.

What makes Theorem unique

• Theorem uses machine learning to invest in loans from online platforms.
• The company combines quantitative data analysis with qualitative credit insights.
• Theorem focuses on loans statistically more likely to be repaid, like wedding loans.

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Funding

Total Funding

$2.4M

Below

Industry Average

Funded Over

1 Rounds

Notable Investors:

Y Combinator

Notable Investors:

Y Combinator

$2,500,000

Seed

Mar 2014

Seed funding is usually the first official round after pre-seed, when a startup has a prototype or concept. It’s typically used to develop the product, test the market, and start building the team. Investors here are often angel investors or early-stage venture capitalists.

Seed Funding Comparison

Below Average

Industry standards

Ind Avg. $3.3M

$500k

$1.5M

$2M

$2.3M

$2.5M

$3M