Fuse Raises $25M to Revolutionize How Credit Unions Approve Loans
Credit unions across the United States are stuck with outdated loan origination software that takes nearly a year to implement and locks institutions into costly multi-year contracts. Fuse, an AI-native fintech startup, just raised $25 million to change that — and it is offering a lifeline to the first institutions willing to make the switch.
 |
| Credit: Fuse |
How Fuse Was Born From Frustration
The story behind Fuse begins with two immigrant founders who refused to accept the status quo. Andres Klaric, originally from Bolivia, and Marc Escapa, a Spanish immigrant, spent three years building an automotive lending startup before a major realization hit them in 2023. Large language models had advanced enough to tackle something far more consequential than car loans: the loan origination system, or LOS, the central nervous system of the entire lending industry.
Frustrated by the limitations of aging software platforms, the two co-founders pivoted their business entirely. Instead of building products on top of broken infrastructure, they decided to replace the infrastructure itself. The result was Fuse, an AI-native loan origination platform designed from the ground up with modern technology.
What Is a Loan Origination System and Why Does It Matter
A loan origination system is the primary software platform that lenders use to manage the full lifecycle of a loan. From the moment a borrower submits an application, through underwriting and risk assessment, all the way to approval and disbursement — the LOS handles every step. For most credit unions and community lenders, this system is the single most important piece of technology they operate.
The problem is that the dominant systems in the market were built decades ago. They are slow to integrate, expensive to maintain, and notoriously difficult to customize. According to Klaric, implementation alone can take up to a full year, leaving institutions in a prolonged state of transition before they ever see a benefit. The contracts tied to these legacy platforms are long-term and punishingly expensive to exit.
The $25 Million Bet on AI-Powered Lending
On Monday, Fuse announced the close of a $25 million Series A funding round. The round was led by Footwork and supported by Primary Venture Partners, NextView Ventures, and Commerce Ventures — a group of investors with strong track records backing infrastructure and fintech companies.
The capital will be used to accelerate product development, expand the company's team, and fuel its aggressive push into the credit union market. Fuse already counts more than 100 customers on its platform, a significant milestone for a company that only recently pivoted its core business model.
This funding positions Fuse squarely in the growing conversation around AI transformation in financial services. While much of the headlines have focused on consumer-facing AI tools, Fuse is targeting the back-end plumbing that determines how quickly and accurately loans get approved.
AI Agents That Automate Underwriting and Cut Costs
At the heart of Fuse's platform are AI agents designed to handle the heavy lifting of loan processing. The company claims its technology can help lenders process significantly higher volumes of loan applications without proportionally increasing headcount. Underwriting — traditionally a time-intensive and human-heavy process — can be automated, reducing both the time to decision and the potential for human error.
Operational cost reduction is a major selling point, particularly for credit unions, which are member-owned nonprofit institutions that operate on tighter margins than traditional banks. When back-office costs come down, those savings can theoretically be passed on to members through better rates and fewer fees. That alignment between technology efficiency and member benefit is central to how Fuse is pitching its platform.
The $5 Million Rescue Fund Explained
Perhaps the most unusual aspect of Fuse's announcement is the $5 million rescue fund it has created for credit unions wanting to make the switch. The company is offering free access to its platform for the first 50 qualifying institutions — at no cost until their existing contracts with legacy vendors naturally expire.
Klaric is direct about why this was necessary. Many credit unions want to modernize but simply cannot afford the financial penalty of breaking an existing long-term contract to move to a new provider. The rescue fund is designed to absorb that friction and remove the financial barrier standing between institutions and better technology.
Klaric insists this is not a marketing stunt. The $5 million allocation represents a genuine financial commitment to making the transition as painless as possible for credit unions that have been trapped by legacy vendor lock-in for years. It is a bold move that signals just how serious Fuse is about market penetration — and how aware the founders are of the real obstacles their customers face.
Why Credit Unions Are the Right Target
Credit unions represent a particularly compelling market for a platform like Fuse. There are over 4,500 federally insured credit unions operating in the United States, collectively serving more than 130 million members. Many of these institutions are mid-sized or smaller, which means they lack the internal engineering resources to demand better software from vendors or build their own solutions.
At the same time, credit unions are under increasing pressure to modernize. Member expectations have shifted toward digital-first experiences, and competing with larger banks requires speed and efficiency that legacy systems simply cannot provide. Fuse is entering a market that is both underserved and increasingly motivated to change.
The Bigger Picture for Fintech Infrastructure
Fuse is part of a broader wave of companies recognizing that the most durable opportunity in fintech is not building another consumer app — it is replacing the core infrastructure that financial institutions depend on every day. Loan origination is one of the last major categories in banking that has not been fundamentally reimagined with modern technology.
The founders' immigrant backgrounds and firsthand experience building within a broken system give them a perspective that many legacy vendors simply do not have. They have felt the friction personally and built their solution around eliminating it.
With $25 million in fresh capital, more than 100 early customers, and a rescue fund that removes the biggest switching barrier in their market, Fuse is positioning itself as the platform that finally brings credit union lending into the modern era. Whether the industry embraces that change at scale remains to be seen — but the pressure on legacy systems has never been greater.
