Credit where it's due, in real time
Slipstream wants to shake up credit scoring with instant data
What’s so exciting about the world of pre-seed startups is that not every idea is fully formed, not every product is ready for prime time, and not every business model is tweaked to perfection.
It’s about discovering ideas early, but also about teams. Let’s face it, many an angel investor has backed a team rather than their idea, knowing that it’s the people they’re backing, not the specific product they have on their deck at that point.
Today’s startup, fresh from a recent pivot, knows all about that. Having experienced a pain point first-hand in their previous incarnation, can they solve it this time around? Today you can read all about Slipstream.
Slipstream has plans to shake up credit scoring with instant data flows
Credit bureaus hold a somewhat mysterious influence over our lives.
And while it’s easier than it used to be to find out your credit score, there’s still a lot of silent power held by the ‘big three’, TransUnion, Equifax, and Experian, when it comes to getting many kids of loan.
But here’s the thing, financial service providers and fintech companies can find it tricky to work with them too.
Looking to ease the flow of information to and from credit bureaus is Slipstream, a new startup that pitches itself as offering one API to interface with all three of the big credit bureaus. It’s a concept the London-based team came up with while working on their previous startup idea.
“We were renting products out for brands; we were kind of like a buy-now-pay-later business. The problem was how long it took to integrate into the credit bureaus. It took us many months. For some fintechs we’ve met, it's taken them up to a year,” says co-founder Dillon Harindiran.
“As anyone who has worked with products like Stripe will know, integrating into someone's product is something that should be very, very quick and easy to do.”
So Slipstream’s offering will allow anyone who wants to use credit bureau data to get on board and integrate quickly. Harindiran explains that the bureaus aren’t incentivised to spend a lot of effort on making life easier for fintech startups when the vast majority of their revenue comes from large financial institutions.
Let the data flow
Harindiran’s experience as a startup founder wanting to working credit data involved cold-messaging sales people on LinkedIn, navigating opaque pricing structures, and waiting months to get on board as a customer, and then having to get set up for reading and writing data to the bureaus.
“When you work with Stripe, it's really well documented. There are libraries for all the common languages, it's just super easy to use. But with a bureau, it's the exact opposite because they've been built up through decades of acquisitions.
“Every product has a different way of integrating, and there's no consistency… the product isn't where fintechs need it to be… And so these customers are often picking the bureau that is least painful to work with, as opposed to which bureau has the best network coverage for their product.”
By comparison, Slipstream wants to be an easy interface with the bureaus, helping developers get set up as customers, get hooked up into each bureau’s systems, and be able to access and share data with them in a process that it says can take days rather than weeks or months.
As far as that goes, Slipstream is quite similar to what CRS offers in the US. But while the CRS API is about pulling data from credit bureaus, Slipstream is about making the entire two-way data flow between financial service providers and credit bureaus simple and fast.
Ultimately, Slipstream envisages a future where bureaus can use its tech to update credit records in real-time - something that, rather surprisingly in 2023, doesn’t already happen.
The idea is that rather than having to make judgements about creditworthiness based on what happened weeks or months ago, the latest information about an individual’s financial behaviour can allow for faster, and potentially less risky decisions.
There’s a lot more on that vision, and how it could work, below.
The story so far
Harindiran started his career in investment banking before deciding to sate an appetite for entrepreneurship by beginning work on a startup in the middle of that haze of distorted expectations about the future: life under Covid pandemic restrictions.
Assuming that Peloton was the future of exercise (as many others–including Peloton–did), and inspired by the popularity of Klarna, he co-founded the first version of Slipstream. The idea was to run rental programmes for brands like Peloton that had expensive products customers might want to use without committing to buying.
Straight out of banking into the startup world, the experience was an education for Harindiran. He says that underwriting the risk on expensive products and managing the logistics of shipping them to customers (and back, at the end of the rental), while providing code to integrate with brands’ websites, all within the tiny percentage of revenue they could work with, proved difficult.
He says while there was customer demand, scaling the business would just be too difficult. So they pivoted completely in the second half of last year, aiming to fix one of the pain points they’d experienced in their short journey: integrating with credit bureaus as a small business.
The new Slipstream has pent up demand from UK fintech startups keen to use the product, Harindiran says. And integrations with the bureaus are at various stages of completeness, including one he says is ready to go.
“The bureaus understand this is a problem that their customers have. They also understand that they're missing out on this long tail of potential customers. Fintechs that are very small today, five to seven years from now could be the next Monzo, Revolut, or Klarna.”
Investment, vision, and challenges
Essential startup information for PreSeed Now members:
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