Credit unions across the United States have long operated on loan origination software that can take up to a year to integrate and locks institutions into multi-year contracts — a structural problem that has resisted easy fixes until now.
Fuse, an AI-native loan origination system (LOS), announced a $25 million Series A on Monday. The round was led by Footwork, Primary Venture Partners, NextView Ventures, and Commerce Ventures.
The company was founded by Andres Klaric and Marc Escapa, who spent three years building an automotive lending startup before pivoting in 2023. Their realization: large language models could modernize the LOS itself — the system that manages the entire loan life cycle, from application and underwriting through to final approval and credit disbursement.
The Cost of Legacy Systems
Traditional LOS platforms carry high licensing costs and lengthy implementation timelines. According to Klaric, that financial reality traps many credit unions in contracts they cannot afford to exit, even when better options exist. The firm says its AI agents allow lenders to process higher loan volumes, automate underwriting, and reduce operational costs — though these are company claims, not independently verified figures.
Fuse already counts over 100 customers. To accelerate adoption, the startup is offering the first 50 qualifying credit unions free access to its platform until their existing legacy contracts expire. The company has set aside $5 million specifically to fund that program, which it calls a “rescue fund.”
Klaric was direct about the intent behind it. “It’s not just a marketing gimmick,” he said, pointing to the financial barrier that prevents institutions from switching providers mid-contract.
A Market With Over 4,000 Targets
Nikhil Basu Trivedi, co-founder and general partner at Footwork, said his firm backed Fuse because more than 4,000 credit unions operate in the United States and their technology infrastructure is overdue for an overhaul. “We know the credit unions are really hurting and want to adopt AI but have no idea how to do it,” he said. Basu Trivedi compared the LOS to an ERP or CRM in terms of its centrality to day-to-day operations — and described replacing one as historically difficult.
The incumbents Fuse is targeting include publicly traded nCino and private-equity-owned MeridianLink. The startup also faces competition from other AI-focused LOS developers, including Casca and Glide.
Klaric framed the mission in terms broader than market share. Credit unions, he argued, already hold the ingredients for success — local presence, member relationships, physical branches — but lack the technology to compete effectively. “The only thing is they don’t really have is the right technology,” he said.
The announced next step is the activation of the rescue fund program, making free platform access available to the first 50 qualifying credit unions still bound by existing legacy LOS contracts.
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