Shivi Sharma spent a decade working in credit risk at places like American Express and Varo Bank.
At some point, he realized that teams were spending an equal amount of time analyzing all types of loans—whether they were worth $100,000 or $5 million—meaning that evaluating smaller loans was ultimately an unprofitable and time-consuming process for lenders.
She and her husband, Utsav Shah, realized there was an opportunity here.
“He watched as the vast majority of small business owners couldn’t access the capital they needed to grow, simply because the finances didn’t work for the banks,” Shah told TechCrunch.
“Between our skills in building AI decision-making systems at scale and our expertise in credit risk and fraud assessments in financial services banking, we realized we could apply next-generation AI agent workflows to solve this decades-old problem,” he continued.
The married couple decided to launch Kaaj in 2024, a company that helps automate credit risk analysis so that underwriting no longer takes days, but minutes. Kaaj said it has processed more than $5 billion in loan applications, with clients including Amur Equipment Finance and Fundr. The company announced Wednesday a $3.8 million seed round from Kindred Ventures and Better Tomorrow Ventures.
The product works like this: A small business applies for a loan, submitting all the necessary documents (such as financial statements, bank statements and tax returns) — typically when this happens, underwriters spend days manually verifying all this information and plugging it into the Loan Origination System (LOS).
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Kaaj uses AI to identify, classify, verify and organize information in LOS. Also performs document tampering audit assessments for the contractor fraud team. It integrates with existing Customer Relationship Management (CRM) systems such as Salesforce, HubSpot or Microsoft and even shows the lender if a business meets the criteria of a lender’s policy.
“This allows a team that processes 500 applications a month to handle 20,000 applications with the same staff, making smaller loans financially viable,” said Shah, the company’s CEO.
The hope is that more small businesses will be able to access loans from banks because it becomes more cost effective for a bank to investigate them.
Others on the market include Middesk, Ocrolus and MoneyThumb. Sharma hopes Kaaj will set itself apart from the competition by automating the entire credit analysis process, not parts of it.
“We do this by developing practical AI workflows that mimic their teams, to help lenders analyze loan packages end-to-end,” he said.
The new capital will be used to help accelerate product development and expansion into independent and small business lenders. “We are focused on strengthening our AI agent capabilities, expanding our unit offerings, and scaling our lender and broker customer base beyond our current footprint.”
Overall, Shah and Sharma hope Kaaj can go some way to “revolutionizing” small business lending by bringing automation to a process that is still very paper-heavy.
“By automating the science of credit analysis, we free up human underwriters to focus on the art of closing deals and subjective evaluation, which is their real competitive advantage,” he said.
