Fuse raised $25 million to displace legacy systems in U.S. credit unions

Fuse raised $25 million to develop an AI-native platform designed to replace outdated lending systems in American credit unions. Simultaneously, the company announced a $5 million rescue fund—a special fund that covers the costs of exiting existing contracts with legacy vendors. The market targeted by Fuse has long been considered a technological anomaly.

American credit unions—non-profit financial organizations serving approximately 135 million members and managing assets exceeding $2 trillion—largely continue to operate on software systems created in the 1990s and early 2000s. Loan Origination Systems (LOS) are supplied by a limited circle of vendors—Fiserv, Jack Henry, FIS—who have dominated the market for decades. The result: slow application review, high manual labor costs, and practical impossibility of integrating modern AI tools.

Fuse offers a platform written from scratch without legacy code baggage. The key principle is AI by default, not as an overlay on legacy systems: automatic credit risk assessment, analysis of borrower financial behavior, real-time integration of external data. According to the company, this allows significant reduction in application review time and operational expenses.

For credit unions competing with banks and fintech services, loan approval speed has long been a competitive advantage. The most unconventional move was the announcement of the rescue fund. The main barrier to platform migration is not unwillingness to change, but the financial costs of exit.

Legacy vendor contracts are typically long-term and contain penalty clauses: for a small union with $100-300 million in assets, early termination costs can reach hundreds of thousands of dollars. Fuse covers these expenses. Essentially, the company pays for the right to take the client away from a competitor—a model familiar in telecommunications, but rare in B2B fintech.

This step signals confidence in unit economics: if Fuse is willing to invest in customer acquisition upfront, the company expects sufficiently strong long-term value. A credit union is not a startup with a two-year horizon, but a stable regulated institution with predictable business. Approximately 4,800 credit unions in the United States represent the platform's potential audience.

Most lack in-house IT teams capable of conducting technological transformation independently, making a ready-made solution with implementation support particularly attractive. Fuse's strategy is a classic attack on a conservative market: eliminate not only the technological barrier but also the financial barrier to switching. If the rescue fund proves effective, the model could become a template for other segments of financial infrastructure where legacy systems maintain positions not through quality, but through high exit costs.