DirectID Secures $9.5 Million in New Funding
  • DirectID, a credit risk assessment and decisioning platform based in Scotland, has raised $9.5 million (€9 million) in funding.
  • The funding was led by Ingka Investment, the investment arm of Ingka Group – which is the world’s largest IKEA retailer.
  • DirectID will use the new capital to accelerate the launch of its predictive credit and risk models built using open banking data.

Credit risk assessment and decisioning platform DirectID has raised $9.5 million (€9 million) in funding from Ingka Investments, the investment arm of Ingka Group. The company will use the additional funding to help fuel the launch of its predictive credit and risk models built using open banking data. DirectID also plans to bring its credit risk solutions to new markets, as well as accelerate its development of models for each stage of the credit lifecycle – from originations to portfolio management to collections.

“We are excited to be shaping a new global standard in credit scoring that enhances people’s lives by enabling access to products they need in an affordable way,” DirectID founder and CEO James Varga said. “Our coverage, advanced insights, and predictive models provide a unique opportunity to achieve this by creating the world’s first real-time, inclusive, credit score based on open finance data.”

The funding takes DirectID’s total equity capital to more than $23 million. No valuation information was provided in the company’s funding announcement.

Headquartered in Scotland, DirectID is the current incarnation of a project that began in 2016, when Varga rebranded his company miiCard to The ID Co. The move was intended to reflect the growth of the company’s B2B embedded, integrated verification solution, DirectID. Four years later, the company took the Direct ID name in a move Varga said was necessitated by the fact that “data has become such an important part of our offering.”

Ingka Group is the world’s largest IKEA retailer, representing approximately 90% of IKEA’s retail sales. Ingka Investments, the company’s investment arm, has $21.2 billion (€20 billion) in assets under management. The firm’s investment activity is oriented around three “key strategic movements”: financial resilience, business development, and sustainability. Peter van der Poel, who is the managing director for Ingka Investments, credited DirectID for its ability to “complement and disrupt the traditional credit and risk market”. He noted that the company’s efforts promote greater financial inclusion for consumers and will “add value to Ingka’s financial services proposition” going forward.

DirectID closed out 2022 by forging a partnership with U.K.-based SME capital provider Got Capital. The alliance will facilitate the digitalization of the application process for small businesses seeking financing. Since inception, Got Capital has provided more than $362 million (£300 million) to more than 12,000 small businesses in the U.K. Also late last year, DirectID’s Varga was one of 13 business leaders named as the first “Scottish Export Champions” by the Department for International Trade (DIT). The organization also named DirectID as the new “FinTech Champion for Scotland.”

“Whether it’s working with other industry figures to promote the U.K. as a place to do business, or sharing knowledge of our experience exporting to multi-national organizations, I’m proud to be supporting the growth of the £11 billion U.K. fintech economy,” Varga said.

Photo by Isaque Pereira