Kaaj Secures $3.8M Seed Funding From Kindred Ventures

Kaaj, a new fintech startup founded by industry veterans, has successfully raised $3.8 million in seed funding from Kindred Ventures and Better Tomorrow Ventures. The company aims to transform small business lending by using advanced artificial intelligence to automate the entire credit risk analysis process.

Shivi Sharma, who spent ten years in credit risk roles at major institutions like American Express and Varo Bank, identified a critical inefficiency in the lending industry. She noticed that financial teams were dedicating the same amount of time and resources to evaluate every loan application, whether it was for $100,000 or $5 million. This approach made smaller loans particularly unprofitable and slow for lenders to process.

Observing that many small business owners struggled to obtain necessary capital simply because banks found it uneconomical to underwrite smaller amounts, Sharma and her husband, Utsav Shah, recognized a significant opportunity. Combining their expertise in AI-driven decision systems and credit and fraud risk assessment, they founded Kaaj in 2024 to address this long-standing challenge.

Kaaj’s platform leverages next-generation AI agent workflows to automate credit risk analysis, reducing underwriting time from several days to just minutes. The system has already processed over $5 billion in loan applications for clients such as Amur Equipment Finance and Fundr.

Here’s how the technology works: when a small business submits a loan application along with required documents, financial statements, bank records, and tax returns, Kaaj’s AI immediately identifies, classifies, verifies, and organizes the information directly into the lender’s Loan Origination System. It also performs checks for document tampering and integrates seamlessly with existing CRM platforms like Salesforce, HubSpot, and Microsoft. Additionally, the system informs lenders whether an applicant meets their specific policy criteria.

Utsav Shah, who serves as CEO, emphasized the operational impact: “This technology enables a team that previously handled 500 applications per month to manage up to 20,000 applications with the same staff, finally making smaller loan underwriting economically viable.”

The broader vision is to increase small businesses’ access to bank financing by making the lending process significantly more cost-effective for financial institutions. While other companies like Middesk, Ocrolus, and MoneyThumb operate in the same space, Sharma believes Kaaj stands apart by automating the complete credit analysis workflow rather than just individual components.

“We deploy agentic AI workflows that replicate human underwriting teams, allowing lenders to analyze loan packages from start to finish,” Sharma explained.

The newly secured $3.8 million in seed funding will be directed toward accelerating product development and expanding Kaaj’s reach among independent and small business lenders. Plans include enhancing AI agent capabilities, broadening module offerings, and scaling the customer base of lenders and brokers.

Ultimately, Shah and Sharma envision Kaaj revolutionizing small business lending by replacing outdated, paper-intensive procedures with intelligent automation. “By automating the science of credit analysis, we enable human underwriters to concentrate on the art of deal-making and subjective assessment, where their real competitive edge lies,” Shah noted.

(Source: TechCrunch)