Zest AI, a provider of AI-powered lending solutions, has announced the completion of an oversubscribed financing round led by five of its key customers, including SchoolsFirst Federal Credit Union, Members 1st Federal Credit Union, ORNL Federal Credit Union, Truliant Federal Credit Union, and Citi, through its investing group Citi Ventures. The new capital aims to expand Zest AI’s automation initiatives and further implement its Generative AI-powered lending intelligence platform, LuLu.
This funding round reflects a significant increase in Zest AI’s valuation compared to its previous growth round, indicating the company’s momentum as financial institutions integrate AI-driven solutions into their underwriting processes. The capital infusion is intended to advance automation capabilities across the entire borrower journey and facilitate broader adoption of its LuLu platform.
The demand for AI-enabled capabilities in financial services is growing, with lenders increasingly utilizing artificial intelligence to enhance underwriting accuracy, broaden access to credit, streamline operations, and stimulate growth.
Bill Cheney, CEO at SchoolsFirst Federal Credit Union, commented on the impact of Zest AI’s technology: “Our instant approval rate has more than doubled. Institutionalizing Zest AI’s technology across our lending operations has been game-changing for our member experience and our business results.” He added that the partnership has delivered real value and is expected to drive future innovation.
Michael Wilson, CEO of Members 1st Federal Credit Union, discussed the role of advanced solutions in modernizing lending operations and improving credit access. “Through our use of LuLu, Zest AI’s Generative AI lending intelligence platform, we’ve seen firsthand how it helps lenders to become better financial institutions through sizable and scalable solutions with complete transparency in its decisioning models,” Wilson stated. He also noted LuLu’s value in benchmarking data against peers, enabling agility and decisive action within the platform. Wilson emphasized confidence in AI use without compromising compliance or performance, expressing excitement for LuLu’s potential for the industry and regulators, which informed their decision to deepen the partnership as an investor.
Zest AI, founded in 2009 in Burbank, California, has established itself in responsible AI for financial services. The company holds more than 50 issued and pending patents and manages over 650 proprietary credit models. Its technology is employed by nearly 300 lenders, ranging from credit unions and community banks to large enterprise financial institutions. Zest AI’s offerings include automated underwriting, the LuLu lending intelligence platform, and Zest Protect for fraud detection.
The company’s machine learning models reportedly deliver higher accuracy than traditional credit scores. On average, these models enable lenders to achieve a 25% increase in approvals without additional risk and a 20% reduction in defaults while maintaining constant approval rates.
Mike de Vere, CEO of Zest AI, characterized the customer investment as a validation of the company’s technology and vision. “This round reflects both financial and operational confidence from institutions that use our AI solutions every day to transform their businesses and deliver greater value to their customers and members,” de Vere said. He attributed strong demand for Zest AI’s solutions to the convergence of regulatory support for AI, increasing competition, and the necessity for efficiency. The investment is expected to accelerate innovation and expand adoption, supporting financial institutions in leveraging AI for greater impact within their communities.
Zest AI focuses on modernizing lending and strengthening the financial system, specifically targeting the $17 trillion US consumer credit market. The company’s AI technology assists lenders in identifying creditworthy borrowers often overlooked by traditional credit assessment methods, while also enabling financial institutions of varying sizes to utilize AI effectively. Zest AI was named on Forbes’ 2024 Fintech 50 List and CNBC’s 2025 World’s Top FinTech Companies list in the Enterprise FinTech category.
