(Bloomberg) -- Pagaya Technologies Ltd. has agreed to buy Theorem Technology Inc., a machine learning-enabled asset manager.
With Theorem, Pagaya's fund management business is expected to grow to more than $3 billion of capital, according to a statement on Tuesday that confirmed a Bloomberg News report.
"Pagaya will be able to fully take advantage of the impressive machine learning investment technology that underlies Theorem's private credit investment platform," Pagaya's Chief Executive Officer Gal Krubiner said in the statement.
Founded in 2014, Theorem uses data science and machine learning to evaluate and identify risks in consumer credit applications. Theorem can conduct independent underwriting of consumer loans originated by lenders such as banks and credit card companies.
The company is backed by Y Combinator and Two Sigma Ventures and has $2 billion assets under management, according to its LinkedIn page.
Pagaya's market value spiked to more than $20 billion in the weeks after going public in 2022 via a special purpose acquisition company. This year, the company's shares have fallen about 14%, leaving it with a market value of around $1 billion.
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