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Deep Dive:, the operating system for non-bank lenders


Hyperscore screen shotWe’re now launching the first in a series of Deep Dives into companies which help investors accelerate alpha and grow. For this inaugural Deep Dive, we are not being paid by the company. However, we may in the future be paid to profile companies which I think are interesting and our community would benefit by learning about. Of course, we’ll disclose any such payments. We look for two attributes in any company we profile in a Deep Dive: 

  • We believe in the company, and would invest given the opportunity. 
  • Our community can learn from the company’s strategic and operational choices. I’m always trying to abstract the broader principles.

One of Versatile VC’s core investment theses is: “Look for investment processes which are highly dependent on Excel.”  Look at The Wall of Shame for the Worst Excel Errors for examples of why that is a strong heuristic.

Here’s an example of what we’re excited about. According to and our own customer interviews, roughly 70% of non-bank lenders are primarily tracking their activities in custom excel sheets with macros. This is not a manageable, scalable, way to grow a lending business. This is a recipe for disaster. Diligent limited partners know this, and view a haphazard backoffice as a major red flag. 


Hypercore, Inc. ( is building the operating system for non-bank private lenders.  Our Venture Partner Scott Lichtman and I have had a chance to meet with management and investors and think they have great potential.

We are particularly excited about Hypercore because of five factors:

  • Early sales traction: Hypercore’s platform now manages $2B from 3,000 loans across 9 customers and 4 continents.
  • Co-founders with 4 years experience as a team both in the Israeli Defense Forces and in a prior startup. 
  • Leading investors. Hypercore was the only Israeli company in their YC cohort. Later, VC became a key investor, and Israel-based Partner Roni Bonjack took a board seat. Roni previously managed global startup accelerator programs at Google and Facebook. In addition, Hypercore has received capital from New Zealand VC firm NZVC and FAST LLC, a subsidiary of GettyLab.  
  • A market-leading application design that’s comprehensive and flexible yet easy to onboard.  
  • A rising tide from Silicon Valley Bank-induced market disruption.  Suddenly even the most lax allocator has been reminded how important a strong back office is. And suddenly, venture debt has become more profitable. 

History and Traction

In 2020, the co-founders were building a software consultancy. A non-bank lending client asked them to build some software to improve operations and they realized how poor existing solutions were. Hypercore pivoted to a product company and then joined the YC Summer 21 session.

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Since going live in July 2021, Hypercore’s platform now manages $2B from 3,000 loans across 4 continents. Hypercore’s level of geographic diversification is unusual in such a young company, all the more so for a product which requires some adjustment for financial norms and law in each market.  

We have reviewed feedback from 6 customers and prospects. Some quotations:

  • “We [the private lender] like to do creative [lending] solutions for our customers, that’s why we could never find software that would work for our business until we found Hypercore.”
  • “We do use a lot of Excel. We’re growing, [but at] a fifth of the rate we could be with the right system.”
  • “We can literally put our entire portfolio in one system [with Hypercore] instead of having to piecemeal everything.”
  • “Managing monthly amortization schedules and debt repayments across 80 investments is very time-consuming and simply not cost effective. We researched many [global] solutions and tested five. …Luckily, we found Hypercore. ”

We think the recent Silicon Valley Bank travails create a rising tide for Hypercore’s boat:

  • More and more lenders and borrowers are managing multiple bank accounts, which creates increased complexity impossible to manage in Excel.
  • Limited partners are paying a lot more attention to back office stability of their investments.
  • Margins are noticeably increasing  in venture lending in particular, where SVB is less of a player. SVB had effectively been subsidizing their venture lending practice with profits from their other lines of business.

Founders, Team & Expertise

The company is led by four equal co-founders with clearly delineated, complementary responsibilities. We will highlight aspects of the team we particularly like:

  • Stable team: The founders have worked closely together for four years in the Israeli Defense Forces and at an earlier fintech software development company, and recommitted to partnership on this venture. 
  • Great artists ship. In a short time, this young team has shipped a sophisticated product and won geographically diverse clients with significant security, reliability, and trustworthiness requirements. One client has commented “We like that the entrepreneurs are very, very smart and conservative. ”
  • More than many other companies we’ve evaluated for investment, Hypercore deeply incorporates customer input as part of the company’s DNA. Every feature is reviewed by the customer base during the design process and feedback is continuous. One customer has said: “We really like how our feedback is so valuable to you and your reaction time is really, really good.”
  • The CEO has experience managing at scale. Dan Liechtenstein served as Head of ICT Financial Planning for the Israel Defense Forces, negotiating technology contracts worth $100s of millions and organizing a military venture capital fund.

Brief backgrounds of the other three co-founders: 

  • Eitan Frailich, Chief R&D Officer: Leads development of the cloud-native, customizable and scalable platform underlying Hypercore’s application. Previously, co-founded software consultancy Articode, where he managed the design for a range of financial services applications. Before that, Eitan spent 6 years in the Israeli Air Force developing critical front-end applications.
  • Tomer Moshe, CTO: Co-founded Articode and Hypercore, where he drives application development. While in the Air Force, created an open-source infrastructure for real-time GIS that defense contractors use worldwide. Tomer has 12 years experience as a full-stack developer.
  • David Yahalomi, Chief Product Officer: Responsible for defining and streamlining the digital loan process, and also in charge of client relations/success. Also co-founded Articode, where he co-built software solutions for banks and payment processors and served as iOS lead developer for Pepper Bank.

The company has run lean and currently employs nine full-time staff, concentrated in the technology functions, including the founders. All software development is in-house. The board consists of the four co-founders, as well as Ms. Roni Bonjack of VC investor

Business Problem in Detail

Hypercore addresses the problem that all but the largest non-bank lenders tend to rely on Excel as the core application/data repository to manage the complex, labor-intensive processes in loan originations, underwriting, servicing, portfolio management, investor management, reporting, etc. 

The fundamental issue is that a massive amount of labor is involved, yet automation has been limited. A series of complex procedures must be performed across origination, underwriting, legal, servicing, portfolio management, investor relations, accounting, reporting and risk/compliance. For a given lender and loan package, 10 or more spreadsheets may be maintained per loan; this is multiplied by hundreds or thousands of loans. Excel-based lenders have no ability to exploit the efficiencies, operational controls, and business intelligence insights from a modern, integrated lending platform. 

Some lenders have evaluated a technology upgrade, but continue with Excel because unique aspects of their underwriting and packaging across loan structures have been unfulfilled by existing solutions.

Meanwhile, private lenders that want to scale require further digitization when it comes to institutional investor interactions. Simply put, non-bank lenders need to pervasively modernize their practices and platform, but can’t afford complex and overly expensive integration or reengineering efforts.

Solution Details

The Hypercore OS Platform is a full lifecycle Lending as a Solution (LaaS / cloud) offering. It delivers fast onboarding, much more efficient operations, elimination of key-in errors, and integration possibilities (through APIs). Customization to the specific lender’s needs is parameter-driven and requires no technical coding. 

Hypercore’s solution is both deep and broad. It stands out for its support of any type of loan model to a degree that lending organizations no longer feel compelled to keep using custom Excel models to represent their business. 

It can service the loan throughout its complete lifecycle, including but not limited to:

  1. Origination – improve the speed and reduce the effort of data collection
  2. Servicing – amendments, statements, interest and balance calculations, expected cash flows, etc.
  3. Reporting – Use Hypercore as a BI solution for operational and compliance reporting, with the ability to create risk and executive dashboards.

When it comes to variations in loan terms, Hypercore supports straightforward customization of the loans’ representation. 

Because underwriting remains the “secret sauce” for lenders, Hypercore focuses on importing the results rather than modeling the underwriting process.  

Target Market 

Hypercore is targeting all types of non-bank private lenders, as cross-sector there are common infrastructure modernization needs and functional needs. In particular, they have found that the functional needs for originations and servicing in particular tend to be similar across lenders. Globally, there are 300,000 such private lenders.


In most sales situations, the prospect does not have a full-time CTO but does have a technology lead. Product/technology discussions tend to focus on business features rather than what is under-the-hood for this SaaS offering. Having said that, we present salient technical considerations below:

Hypercore’s Lending as a Service OS Platform runs on Amazon Web Services. It employs a serverless architecture (the number of servers and other hardware resources needed at a given moment is managed seamlessly by AWS), which provides easily managed scalability.

The application environment employs AWS Foundational Security best practices. Data is fully encrypted in transit or at rest. AWS Shield protects against distributed denial of service attacks.

Hypercore expects in Q2 to be certified SOC2 compliant. Developed by the American Institute of CPAs, the SOC2 framework establishes auditable criteria for managing customer data based on principles of security, availability, processing integrity, confidentiality and privacy.

API-based integrations with related applications and data (e.g. accounting and sales tracking software used by the borrower, such as QuickBooks or Salesforce) are on the application roadmap. It is projected that the first accounting/CRM/banks/payments integrations with market-leading applications and data will be complete in Q3 2023.

2023 Plan

Hypercore plans to significantly expand their US activities and is actively hiring for engineering (Israel) and sales & marketing roles (US).   


  • As Hypercore is providing an encompassing platform to support most of the lending function, prospective clients want to feel comfortable that the company has staying power. Hypercore has already won the first half-dozen clients, given the unique attractiveness and ROI of their platform and will improve further with profitability and greater adoption.   
  • The management team has limited prior experience with the private lending sector. However, they embody a focus on customer requirements and rapid iteration.Their experience level would have been a significant risk factor for us at the seed level, but today the firm has fully addressed that concern. 
  • The company reports that the banking sector dynamics and recessionary possibilities in the US have not affected the pace of prospecting and sales at this time. On the positive side, it’s possible that the private lenders they serve will encounter expanded lending opportunities as public banks tighten their underwriting criteria. 
  • Hypercore’s team resides primarily in Israel, which is currently undergoing some political uncertainty. The CEO reports no impact of location at this time on customer interest. The fact that the company is structured as a Delaware-incorporated C Corp. provides some long-term flexibility with respect to  locations.  

Disclaimer/Disclosure: THIS IS NOT INVESTMENT ADVICE! This is for educational and entertainment purposes only. Do your own diligence. 


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