A George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steam

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  • dv01, a fintech backed by George Soros's Quantum Strategic Partners, has raised $15 million in a series B fundraising round.
  • The fundraising brings the valuation to between $80 million and $120 million.
  • dv01 collects, cleans and analyzes consumer-loan and mortgage data that underlies tens of billions of dollars in bond securitizations.

A fintech startup that acts as a data hub for Wall Street bond investors has raised new money to fuel its expansion just as analysts grow worried about a softening mortgage market and the implications for the American consumer.

dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01's board.

The fundraising brings dv01's valuation to between $80 million and $120 million, according to a person with knowledge of the figures who declined to provide more detail.

George Soros's Quantum Strategic Partners, Jefferies Financial Group and OCA Ventures, already investors in the startup, also participated in the round. Birmingam, Alabama-based regional bank Regions Financial took a stake for the first time to help the company expand its offerings for midsized lenders.

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dv01 is a data management and analytics startup that began by analyzing the performance data of online consumer loans like those originated by LendingClub and Prosper. The startup, founded by ex-mortgage bond trader Perry Rahbar, pulled together data on more than a dozen platforms and offered the consolidated package to loan investors. Last year, the firm expanded into mortgage securitizations.

"It was the perfect time to raise this money," Rahbar said in an interview. "The one thing we always had to prove to the investor community was the applicability of what we're doing beyond online lending. Last year we broke into mortgages, so now it's time to fuel our growth."

Rahbar will use the fresh funds to hire people, integrate more third-party data providers and push deeper into the mortgage market. It also plans to add about 30 people this year to its existing staff of 60.

The firm is investing at a time when Wall Street may find it more important than ever to have a better understanding of the loans that make up their bond investments. US home sales fell every month last year except February, with the December drop marking the steepest decline in more than seven years, according to data released earlier this week by the National Association of Realtors. The numbers raised red flags for Wall Street investors and analysts, with UBS economists saying in a recent note that "the deterioration in housing and its intensification since midyear raise the possibility of underlying weakness in the household sector."

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dv01 pioneered the idea of serving as a loan-data agent on bond securitizations, replacing outdated Excel spreadsheets and manual processes with a modern technology platform that gives investors an easy to way to track and analyze the performance of the underlying loans. The firm piloted the role on a 2016 bond deal underwritten by Jefferies and made up of LendingClub loans, and it has since expanded the model to over 100 deals.

The mortgage market expansion will see dv01 provide more data and analysis on private-label mortgage securitizations, including adding capabilities for prime jumbo loans, or those that are made to creditworthy borrowers but too large to be sold to Fannie Mae and Freddie Mac. Other consumer asset classes may be next.

"Think of us as a data hub for the capital markets," Rahbar said. "We want to own the desktop for structured finance."

This fundraising brings the total money raised by dv01 to $28 million. The startup raised $5.5 million in September 2017, following a $2.5 million seed round and a $5 million convertible note earlier that year.

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