Author: Hannah Gilliland

Blooma Announces Investment From Fintech VC Firm, Nyca Partners

Blooma Uses AI and Machine Learning to Enable Commercial Real Estate Lenders to Reduce Loan Origination Time and Cost While Improving Deal Analysis

SAN DIEGO – November 03, 2020 – Blooma, the leading digital underwriting solution for commercial real estate lending, announced that the venture capital firm Nyca Partners has invested in the Company’s latest round of funding. Since its launch in 2019, Blooma has successfully deployed its engineering, operations and marketing/sales infrastructure to release its highly anticipated artificial intelligence and machine learning platform in December 2019. Many leading financial institutions have already become users in the past nine months, which is what caught the attention of Nyca.

During the summer, Blooma raised $3m in additional capital from Nyca. While CRE originations virtually stopped in March when COVID hit, it became more important than ever for lenders to understand how the new environment was affecting the loans they are currently servicing. Blooma has been able to use the capital to speed up time to market while continuing to invest in product that helps CRE lenders automate how they analyze existing loan portfolios and originate new loans.  In September, Blooma saw origination dollar volume double in its platform, active users increase by 122%, and new lender onboarding activity grow by 400% from August.

“Blooma is innovating in a space that has seen very little technological advancement,” said Hans Morris, founder of NYCA Partners and long-time Citigroup banker and former President of Visa. “Their AI team, in conjunction with commercial lending experts, developed a platform that vastly improves a slow, labor-intensive, and imprecise system. It automates the underwriting process, speeds up deal assessment and provides portfolio analytics to greatly mitigate risk — in an environment in which risk is constantly evolving. It is super-impressive, and we are excited to be part of it.”

“We’re thrilled to have Nyca on board,” commented Blooma co-founder and CEO, Shayne Skaff. “We were instantly drawn to the organization’s intellectual capital. Nyca brings to bear a distinguished group of financial and technology advisors who have exceptional breadth and depth of experience in our industry, which has already proven to be invaluable.”

Blooma’s primary customers are lending organizations with $1 billion or more in commercial real estate assets, such as commercial and private banks. Blooma customers subscribe to the platform, enabling customization that meets their precise requirements for borrower profiles, compliance preferences, sales pipeline management, determination of risk and more.

About Nyca

Nyca Partners is a venture capital firm exclusively focused on applying innovation in financial services into the global financial system. Their rich experience and deep connections in both finance and technology offer a unique perspective and ability to help entrepreneurs transform payments, credit models, digital advice, and financial infrastructure. The organization strives to form truly collaborative partnerships, offering both investment capital and expert advice. The Blooma investment team is comprised of Hans Morris and Jeremy Solomon. You can follow Nyca on Twitter @nyca or our website at www.nyca.com. To find a full list of our portfolio companies please visit www.nyca.com/portfolio.

About Blooma

Founded in 2018 and based in San Diego, Blooma drives a faster and more intelligent commercial real estate lending experience through the use of a unique digital underwriting platform driven by artificial intelligence and machine learning. Blooma’s AI platform helps lenders reduce loan origination time and cost and perform a more comprehensive analysis of their transactions. Integrating with dozens of third party market data providers, Blooma automatically analyzes asset and borrower data and continuously tracks and audits loans or entire portfolios in real time, providing lenders with early indications of risk. This unique approach reduces commercial loan origination time and costs by as much as 75% and significantly improves time to revenue for private and commercial banks and other lending organizations. Blooma has achieved both Service Organization Control 1 and 2 compliance. More information is available at http://blooma.ai/.


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Top 10 Lending Management Solution Providers 2020

Blooma

Innovating the Commercial Lending Experience

When it comes to commercial lending, the digital revolution’s impact on the finance industry has been somewhat underwhelming. Commercial real estate (CRE) lenders have long been subjected to time-consuming, manual screening of loan applicants, as well as analyzing deal attractiveness and risk. Lenders hire loan underwriters to collect data, analyze the deal, and evaluate the risk. The majority of this process is very manual and time consuming, lasting months in some cases. Founded in 2018, Blooma, a San Diego based startup, aims to automate the commercial lending experience by digitizing aspects of the tasks that lenders currently perform manually and allowing the underwriters to concentrate on the “art” of lending. “Blooma is essentially a digital underwriter for commercial lending that helps lenders create more efficiency in their loan origination and the ongoing post origination loan  auditing processes. We take out the manual process, reduce the cost to originate and audit current loans in the loan portfolio, and increase overall efficiency and profitability for the lenders,” says Shayne Skaff, Co-Founder and CEO at Blooma.

Skaff was approached by the founder and chairman of C3bank and ABP Capital, Michael Persall, who wanted to automate his commercial lending businesses. Seeing how manual and tedious the client’s original loan origination process was, Skaff soon realized that their numerous point solutions and methods of analysis, were not on one integrated platform. This led to the creation of Blooma’s AI-driven platform that automates 80% of the underwriting process, resulting ineffective and faster commercial loan underwriting, without the need for lenders to remove and replace existing tools. “Our comprehensive platform brings together those point solutions in a much more efficient way for lenders. We worked with multiple lenders and their underwriters to learn about their respective manual underwriting processes and procedures around auditing their current loan portfolio. We mapped out exactly what they do and by leveraging those insights, we built our software,” states Skaff.

Traditionally, when lenders get a new origination deal or audit a current loan in their loan portfolio, they have to trudge through the evaluation and analysis process, gathering the data needed for cash flow and valuation analysis (both actual and based on market comparables. Additionally, while underwriting or auditing that deal, they need to collect information about the borrower through their bank statements, tax returns, Schedule K-1,  and  more. This process leads to the decision whether the deal is going to meet the lending criteria for that specific lending institution.

Blooma enables banks to outsource these processes to its AI engines. Blooma automated the extraction of information from existing offer memorandums, rent rolls, and P&L statements and aggregates this data with third party market data to provide information about the local real estate markets, comparables, neighborhood crime statistics, walk score, and any other information that may impact the loan. The platform collects, analyzes, and then complies a complete overview of both assets and borrowers, making the loan underwriting process faster and smarter. This same real-time analysis process offers automated, continuous post origination loan auditing, providing lenders with an early indication of risk. Blooma then refines the data through machine learning and creates a property profile tied to a borrower’s application. The loans are also continuously screened according to the lender’s requirement of the ideal lending profile, all while the platform monitors key deal metrics and automates loan auditing. All of these steps help ensure that the lending portfolio continues to perform at optimal efficiency. Lastly, all this information compiles into a lending profile score which represents the probability that the deal will fit within the lender’s own predefined lending profile. In Summary, the use of AI within Blooma is as an intelligent way to automatically collect and analyze data to help people make better decisions, not to make decisions for them.

Another way where Blooma is unique is that implementation only takes 30-60 days as opposed to existing loan origination systems where implementation could be very costly and last over a year. Blooma can be implemented as a standalone SaaS platform or integrate with the lender’s existing Loan Origination System (LOS). “We do all of our analysis and provide those systems with the proper information for the underwriters and analysts to make decisions. They can look at one hundred deals and actually turn that around in Blooma within minutes and make decisions against those loans based on which ones meet their lending criteria the closest,” says Skaff. The added benefit of Blooma  is the fact that the company doesn’t lock these lenders into massive long- term agreements and stays flexible and friendly on the subscription side. Even during the Covid-19 pandemic, Blooma is getting new data on assets all over the country, on a real-time basis. “When we’re connected to a lender’s loan portfolio, Blooma is constantly updating that asset information and telling the lenders how that information impacts the loan in the form of a Blooma score,” explains Skaff.

“Blooma serves as a digital underwriter for commercial lending that helps lenders create more efficiency in their loan origination and underwriting procedures.”

He asserts that unlike the starting days of Covid-19 when commercial banks struggled to keep up with PPP (Paycheck Protection Program), they are now more accustomed to the new normal as new projects are starting to move through. After closing a few commercial deals in July in the wake of the recent developments in the industry towards normalcy, the company aims to put its commercial strategy in place with full effect. Having geared itself up for the future, Blooma plans to continue innovating and adding more functionality to their product on a regular basis. Blooma is also bringing in new talent to its workforce, including biz dev folks and sales leadership. “We are actually building out a new module for Blooma called the portfolio analyzer that gives our lenders the ability to actually analyze their portfolio in ways that are far more effective than today’s manual processes,” says Skaff. The company’s portfolio management analyzes and automates portfolio monitoring and stress testing. It provides the users with a complete overview of their loans and maximizes their lending power with scenario analysis. With this module, the company aims to offer effective visibility to potential events that would improve the profitability of their client’s portfolios. BC

Blooma’s AI is Automating Commercial Real Estate Underwriting

The days of manually pulling comps and wasting hours trudging through borrower documents is over.

The Blooma platform serves as a digital underwriting assistant by automating the collection, aggregation, and analysis of deals to help lenders determine the right asset valuation and deal attractiveness with minimal human interaction. This includes asset, borrower, and financial analysis, as well as loan portfolio management, and tracking and auditing of loans over time. The platform is primarily driven by Blooma’s artificial intelligence analysis and scoring of each deal according to the lender’s predefined lending profile.

Blooma’s AI can read an offering memorandum, automatically pull relevant comps, read borrower documents, spread a borrower’s cashflow/liquidity, and analyze an asset’s potential LTV in a matter of minutes. Additionally, Blooma can integrate with existing LOS Systems, so lenders do not have to change their current user interface. The Blooma platform will simply streamline the data that underwriters are already manually entering into the existing LOS system.

As of late, commercial lenders have been busier than ever juggling everything from CRE portfolio auditing and refinancing to having all hands on deck processing PPP applications. Blooma’s focus on digital loan portfolio auditing and analysis against current market conditions has resonated with lenders as they work to figure out how current conditions impact original loan parameters. In response to the COVID-19 pandemic, Blooma is also launching portfolio stress testing, not only for each individual deal in the lender’s portfolio, but also for the entire loan portfolio. Users on the platform can stress test their portfolio by manipulating aspects of each deal, such as cap rate or vacancy, to assess the impact of an economic downturn on their portfolio. Once a deal has been originated, Blooma is continuously updating market data and deal scores based on the most current information.

In summary, Blooma’s technology automates 80-90% of the time-consuming data entry aspects of the commercial real estate underwriting process. Imagine a system in which originators can click a few buttons to analyze the asset and borrower and produce an LOI or credit memo in minutes instead of days. Blooma is bringing the commercial lending sector into the 21st Century by streamlining the analysis of assets and borrowers with the power of AI.

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