LoanStar Technologies Announces $28M Funding Round Led by Sageview Capital

Growth Capital Will Fuel Next Phase of Innovation and Expansion

SWARTHMORE, PA / ACCESSWIRE / January 30, 2024 / LoanStar Technologies, Inc. ("LoanStar" or the "Company"), a leading financial technology company focused on embedded lending, today announced it entered into an agreement to raise approximately $28 million of growth equity from a group of strategic investors, including approximately $20 million from Sageview Capital ("Sageview"), and the remainder from a mix of existing and new partners including, Launch Credit Union (via their wholly owned CUSO Holding Company), TruMark Financial Credit Union, Ben Franklin Technology Partners of Southeastern Pennsylvania, and Monarch Strategic Advisors. LoanStar plans to use approximately $12 million of the investment, which closed in January, to expand its sales and marketing organization, continue investment into its market-leading technology platform, deepen strategic partnerships, and strengthen its balance sheet in anticipation of future growth opportunities. LoanStar expects to close on the remaining amount (approximately $16 million) in the next two months, which will be used to repurchase shares from early investors in the Company.

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The funding comes at a time of significant momentum for LoanStar. In 2023, the Company saw $1 billion in total funded loan volume, added 1,000+ active merchants, hired 17 new employees, and added 13 new lenders, totaling over 55 partnered lenders on its platform. 92% of loans created through the LoanStar channel have resulted in a new customer for financial institutions, which have reported around $10 of expanded revenue for every $1 in lending activity through cross-sales of products to the consumer and merchant.

"This is an exciting milestone for LoanStar and allows us to take advantage of the current state of the lending market where the unique characteristics of our technology offer a differentiated value proposition to both the lenders and merchants on our platform," said Andy Turner, LoanStar CEO. "We are beyond excited to partner with an experienced fintech investor like Sageview Capital, who recognizes the value that we have built and can help us execute our next phase of growth. We are also appreciative of the continued support from our existing investors, several of whom are great business partners on our mission to re-intermediate financial institutions into the digital lending process at the point-of-sale."

As a part of the fundraise, LoanStar expanded its board of directors to include Scott Stuart, Founding Partner at Sageview, Mark Brewer, CEO of Launch CUSO Holdings, LLC, and independent director Ronny Chapman who previously worked at FIS and TruStage. These new members will join existing board members Andy Turner and Craig Haynes, LoanStar's CEO and Chief Innovation Officer, respectively.

"Sageview partners with proven companies that leverage disruptive technologies and that have an intimate understanding of their customers' business challenges and objectives," said Scott Stuart at Sageview. "LoanStar clearly excels in all these regards as a unique software provider in the embedded lending market. We were drawn to the unique product design and go-to-market approach of LoanStar and believe that Andy and Craig have put together the right team to develop this business into an industry powerhouse."

LoanStar provides a comprehensive suite of proprietary software, APIs, and LOS integrations that enable embedded lending by connecting lenders and merchants to accelerate the adoption of digital lending at the point-of-consumption. The recent rise in interest rates has made lending challenging for many non-depository financial technology companies. By partnering with banks and credit unions, LoanStar is uniquely positioned to drive volume in the current and any future cyclical environments with a broad portfolio of lending products that re-intermediate financial institutions into digital lending.

Lauletta Birnbaum LLC served as legal advisor to LoanStar. Morris, Manning & Martin, LLP served as legal advisor to Sageview Capital.

About LoanStar Technologies

Established in 2015 by founders Andy Turner and Craig Haynes, LoanStar stands as a pioneering force in banking technology, focusing on embedded lending services. The company's MerchantLinQ platform empowers lenders to provide instant point-of-sale finance through local merchants, offering control over loan underwriting and branded products. With $1 billion in total funding in 2023, LoanStar serves over 55 lenders and maintains relationships with 7,000 merchants. LoanStar enables lenders and merchants of every size to elevate their brand, expand their customer base, and power new business growth through embedded lending and point-of-sale financing. For more information, visit www.loanstartechnologies.com.

About Sageview Capital LP

Sageview Capital is a private investment firm focused on partnering with industry-defining innovators to build enduring software and tech-enabled businesses. With over $2.0 billion in assets under management, Sageview Capital collaborates with entrepreneurs on a custom approach, leveraging its decades of experience, operational expertise, and network in scaling many successful companies. The firm invests for the long-term and has guided many of its portfolio companies to IPO or acquisition-and beyond. Sageview Capital's investments include 360insights, Aceable, Anitian, Atmosphere, CallRail, Carewell, Demandbase, DISQO, Drivewyze, Elastic Path, Elemental Machines, Ezoic, Grocery TV, Impact Analytics, MetricStream, Pantheon, Pax8, NAM, Specright, Stensul, Theatro, User Interviews, and XSELL Technologies, among others. For more information, visit https://www.sageviewcapital.com.

About Ben Franklin Technology Partners of Southeastern Pennsylvania

Ben Franklin Technology Partners of Southeastern Pennsylvania (Ben Franklin) is the Philadelphia region's Partners with a Purpose. Nationally ranked among the most active seed and early-stage investors, Ben Franklin helps high-growth innovative enterprises plant and nurture their roots, creating both immediate connections and lasting economic growth. The nonprofit has supported more than 2,000 companies to deliver an impact of more than $5 billion and 32,000 jobs in the Philadelphia region. Whether in tech, life sciences, manufacturing, or industries and breakthroughs yet discovered, Ben Franklin works to raise the community of innovation higher, to benefit present and future generations of Pennsylvanians. This project was financed in part by a grant to Ben Franklin Technology Partners of Southeastern Pennsylvania from the Commonwealth of Pennsylvania. Visit us at www.partnerswithapurpose.org, or follow us at @bftp_sep.

About Launch Credit Union

Officially chartered in April 1963, Launch Credit Union has been delivering quality financial products and exceptional service to its members for over 60 years. Headquartered in Merritt Island, it stands as the 18th largest credit union in Florida and the 329th largest in the nation. Since its establishment in 1963, Launch Credit Union has experienced substantial growth, boasting 330 employees and serving 84,315 members across 17 locations as of September 2023. For more information, visit https://www.launchcu.com.

Contact Information

Andrew Turner
CEO
andrew.turner@loanstartech.com
844.244.6888 x202

SOURCE: LoanStar Technologies

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