US-based financial technology firm Fuse has secured USD 25 million in Series A funding for its AI-driven loan origination system (LOS).
The financing was spearheaded by Footwork, with contributions from Primary Venture Partners, NextView Ventures, and Commerce Ventures. The funds will be used to expand the Fuse platform into new credit unions and drive advancements in AI-powered lending automation.
Fuse’s LOS is engineered to oversee every stage of a loan lifecycle—from application receipt and underwriting through approval and disbursement—using AI-based tools and large language models for enhanced workflow efficiency and increased processing capacity. More than 100 institutions are currently utilizing the platform.
Addressing Legacy Systems and Switching Costs
Over 4,000 credit unions in the US continue to operate on legacy LOS platforms built with outdated infrastructure. Traditional implementation timelines can stretch up to a year, and many institutions are bound by multi-year agreements that are expensive to terminate. These constraints have hindered technology adoption among smaller, community-focused lenders who often lack extensive engineering resources.
To tackle the issue of high switching costs directly, Fuse has launched a USD 5 million rescue fund aimed at providing credit unions with free access to its platform until their existing contracts with legacy providers lapse. The initiative is intended to reduce barriers for institutions eager to adopt modern technology but unable to exit current agreements promptly.
Founded by Andres Klaric and Marc Escapa, Fuse originally ventured into automotive lending before pivoting to broader lending infrastructure following the identification of opportunities in applying large language models to loan origination. The company faces competition from established LOS vendors such as nCino and MeridianLink, as well as newer AI-focused platforms.
According to Nikhil Basu Trivedi, co-founder and general partner at Footwork, credit unions are keen on adopting AI but require clearer pathways for doing so. Klaric asserts that with their local presence and member relationships, credit unions have the potential to compete effectively, needing only the right technology to reach this goal.
