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Photo: Experian's main U.K. office, the Landmark House, in Nottingham. (Credit: Martine Hamilton Knight)

Experian Spends $385 Million to Acquire ClearScore, a Credit Score Firm with a Chatbot Offering Financial Advice

Credit reporting agency Experian is set to acquire London-based fintech ClearScore for $385 million, the company announced this week. The transaction is subject to regulatory approval and the reported sum does not include “additional earn-out potential contingent on achieving future financial performance,” stated Experian.

Last September, the U.K. startup, which was founded by Justin Basini, Dan Cobley, and Nigel Morris, launching its services in 2015, claimed to reach five million users, who receive free credit reports in addition to offers and financial advice for credit cards, car loans, mortgages, and other financial services and products.

Though the core service comes at no cost to the user, ClearScore makes money on referrals to other financial products along the lines of the business model pioneered by Silicon Valley unicorn Credit Karma.

With the acquisition, Experian is also acquiring the chatbot “coaching” service that ClearScore launched last year. The service takes the form of a robo-advisor that aims to show users how they can improve their credit score and overall financial literacy using natural language processing and a form of artificial intelligence capable of detecting client questions and requests.

“Most knowledge in financial services is delivered in a very dry, un-engaging way: PDFs, long boring articles and huge amounts of small print,” said Basini, the firm’s CEO, in an interview on the company’s website. “We wanted to use natural, open, even fun, conversation to help our users learn about money, credit scores and reports, and finances in general.”

“We invented a chatbot which users can talk with about their finances and attitudes to money,” he added. “At the end of the process we provide a personalised set of actions to carry out which will help to improve your finances.”

Users can use this, and the company’s other services, through apps for iOS or Android as well as the firm’s website.

Experian estimates that ClearScore will produce revenue roughly $55 million in 2018, which would be a 50% jump over 2017. The Dublin, Ireland-headquartered big-three credit reporting agency expects to spend about $20 million as a “one-off integration expenses.”

In a few short years, the company has already won various fintech and startup awards, including the honor of “Consumer Technology of the Year” in 2017 at the National Technology Awards in London.

“Our goal is to provide more choice and greater convenience to individuals who want access to personal financial products,” said Brian Cassin, chief executive officer of Experian.

This article was originally published by Finance TnT. It has been reprinted with permission.

Photo: Experian’s main U.K. office, the Landmark House, in Nottingham. (Credit: Martine Hamilton Knight)

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