Fuse raises $25M to replace aging credit union loan systems

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Fuse raises $25M Series A led by Footwork Ventures and Primary Ventures to modernize credit union loan origination systems
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The startup announces a $5M ‘rescue fund’ to cover migration costs for credit unions ditching legacy software
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Fuse’s AI-native platform targets the 4,600+ U.S. credit unions still running on aging loan origination infrastructure
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The funding signals growing investor appetite for B2B fintech that tackles unsexy but critical infrastructure problems

Fuse just closed a $25M Series A to drag America’s credit unions out of the software stone age. The fintech startup is betting big that thousands of credit unions are ready to ditch their decades-old loan origination systems for an AI-native platform that actually works. To sweeten the deal, Fuse is throwing in a $5M ‘rescue fund’ to cover the painful transition costs that have kept institutions trapped in legacy software hell for years.

Fuse is taking direct aim at one of banking’s most entrenched problems – the creaky loan origination systems that power thousands of American credit unions. The startup’s $25M Series A, led by Footwork Ventures and Primary Ventures, comes with an unusual twist: a $5M war chest specifically designed to help financial institutions escape their existing contracts.

It’s a bold move in a market where switching costs have historically been the biggest barrier to innovation. Credit unions across the country are still running loan processing software that looks like it was designed during the dial-up era, because the pain of migration has always outweighed the promise of something better. Fuse is betting that by removing the financial sting of that transition, it can crack open a massive market.

The numbers tell the story of why investors are interested. According to TechCrunch, there are more than 4,600 credit unions operating in the United States, serving over 130 million members. Most are still using loan origination platforms built before the iPhone existed. These systems can’t handle modern workflows, don’t integrate with newer tools, and require manual processes that would make any tech worker cringe.

What makes Fuse different is its AI-native architecture. Instead of bolting artificial intelligence onto existing workflows as an afterthought, the platform was built from the ground up to automate the tedious parts of loan processing. That means automatically extracting data from documents, flagging compliance issues before they become problems, and routing applications to the right people without human intervention.