CoaXion has confirmed it has closed its pre-Series A funding over-subscribed at $2.65 million for its AI-driven ‘pay as you use it’ technology.

Developed over the last 18 months with an initial commercialisation goal of $1.5 million, coaXion CEO Colin Armbruster said the start-up is aiming to enter the $215 billion US “yellow goods” equipment finance market.

“We’re a new fintech lender in this very specialised space, with proprietary technology that will make us an attractive partner to a broad range of financial institutions in Australia, the US and beyond,” Mr Armbruster said.

“Our ‘pay as you use it’ lending technology provides a new type of finance flexibility for yellow goods owners: if they use the equipment more, they’ll own it earlier, use it less and their repayments are lower.

“This technology, a point of difference in the Australian market from the big four banks and major non-bank lenders, offers real benefits for businesses reliant on yellow goods and looking for capital.”

Co-founder and CTO Chris Maycock said he believes the local equipment finance market has been slow to adopt technology being used overseas and that coaXion will shake up the market.

“Other markets are more advanced in using software to drive usage-based finance: for example, the European and US trucking sectors are using finance based on kilometres or fuel burn,” Mr Maycock said.

“CoaXion’s machine learning algorithms deliver variable pricing and variable terms based on how, and how much, the asset is being utilised,” he said.

CoaXion’s Series A funding round is planned towards the end of 2022.