Kaaj, a startup aiming to overhaul how lenders evaluate small business borrowers, has raised $3.8 million in seed funding from Kindred Ventures, with participation from Better Tomorrow Ventures.
Co-founders Shivi Sharma and Utsav Shah both spent years inside major financial institutions — including American Express and Varo Bank — and saw a persistent inefficiency:
underwriters often spent the same amount of time reviewing a $100,000 request as a $5 million one.
The result? Smaller loans were too expensive to process, causing many small businesses to be overlooked.
“Banks weren’t ignoring small businesses because they didn’t want to help,” Shah said. “The economics simply didn’t add up. We realized AI could finally change that.”
What Kaaj Actually Does
Kaaj launched in 2024 with a platform that automates nearly every step of commercial credit analysis. Instead of requiring an underwriting team to manually review tax returns, financial statements, and bank data for each application, Kaaj’s AI:
- extracts and categorizes documents
- verifies data and detects potential tampering
- populates loan origination systems automatically
- checks applications against a lender’s underwriting policies
- integrates directly with CRM platforms like Salesforce, HubSpot, and Microsoft
Lenders using Kaaj report that tasks that once took days now take minutes. One team that handled around 500 applications per month can now process 20,000 with no increase in headcount.
Since launch, the platform has already analyzed over $5 billion in loan applications. Customers include Amur Equipment Finance and Fundr.
Advertisement
Why It Matters for Small Businesses
Automation dramatically lowers the cost of underwriting, which makes issuing smaller loans financially viable for banks and alternative lenders. Sharma says this unlocks credit access for thousands of businesses that previously wouldn’t have made it through an economic feasibility filter.
Competitors such as Middesk, Ocrolus, and MoneyThumb focus on pieces of the underwriting workflow. Kaaj’s pitch is different: automate the entire credit review process using “agentic” AI that replicates the decision-making patterns of lender teams from end to end.
Funding Plans
Kaaj plans to use the new financing to deepen product capabilities and expand its reach among independent lenders and SMB-focused financial institutions.
“We’re investing heavily in more advanced AI agents and new modules,” Sharma said. “Our goal is to support many more lenders and brokers across the U.S.”
Ultimately, the founders want to shift underwriters from clerical tasks to strategic ones.
“Let humans focus on negotiations and nuance,” Shah said. “Let software take care of the repetitive analysis. That’s the future of small business lending.”
