Kaaj Secures $3.8M to Automate SMB Credit Risk with AI

On Wednesday, AI-driven credit risk platform Kaaj announced a $3.8 million seed funding round led by Kindred Ventures and Better Tomorrow Ventures to eliminate manual underwriting bottlenecks and make small business lending profitable for financial institutions.

The Costly Bottleneck in Small Business Lending

Co-founder Shivi Sharma spent a decade analyzing credit risk at industry giants like American Express and Varo Bank. During her tenure, she identified a systemic inefficiency: underwriting teams spent the same amount of time and resources evaluating a $100,000 loan as they did a $5 million loan. This operational reality made assessing smaller business loans highly unprofitable and time-consuming for traditional lenders.

Recognizing a massive market gap, Sharma partnered with her husband, Utsav Shah, to build a solution. Shah noted that the vast majority of small business owners struggle to access essential growth capital simply because the manual underwriting economics do not work for traditional banks.

By combining their expertise in scaling AI-powered decision systems, credit risk, and fraud assessment, the duo launched Kaaj in 2024. The platform deploys next-generation AI agent workflows to resolve this decades-old banking bottleneck, shrinking underwriting timelines from days to minutes.

How Kaaj Automates Credit Risk in Minutes

When a small business applies for a loan, they submit a dense package of financial statements, bank records, and tax returns. Traditionally, human underwriters manually verify this data and log it into a loan origination system (LOS)—a process that takes days.

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Kaaj revolutionizes this workflow by using advanced AI to automatically identify, classify, verify, and organize applicant data directly into the lender’s LOS. Beyond data entry, the platform runs automated assessments to detect document tampering and alert fraud teams. It integrates seamlessly into existing customer relationship management (CRM) systems like Salesforce, HubSpot, and Microsoft Dynamics, while instantly cross-referencing applications against the lender’s specific policy criteria.

Scaling Underwriting Capacity by 4,000%

According to Shah, who serves as CEO, this level of automation allows an underwriting team currently processing 500 applications per month to scale their capacity to 20,000 applications using the exact same headcount. By drastically lowering operational costs, banks can finally justify the economics of servicing smaller business loans, opening up capital access for underserved entrepreneurs.

Standing Out in a Crowded Fintech Market

While established players like Middesk, Ocrolus, and MoneyThumb operate in the financial data space, Kaaj distinguishes itself by targeting the entire credit analysis pipeline rather than isolated tasks. Sharma explains that Kaaj deploys agentic AI workflows that mimic the decision-making patterns of human teams, analyzing comprehensive, end-to-end loan packages autonomously.

To date, Kaaj has already processed over $5 billion in loan applications, securing high-profile clients such as Fundr and Amur Equipment Finance.

Fueling the Future of AI-Driven Underwriting

The newly secured $3.8 million seed capital will accelerate Kaaj’s product development and support its expansion across independent and small business lenders. The company plans to enhance its core AI agent capabilities, launch new module offerings, and scale its lender and broker network.

By automating the administrative science of credit analysis, Kaaj aims to transition human underwriters away from repetitive data entry, allowing them to focus on high-value subjective assessments and strategic relationship building.