Casca, an AI-native loan origination platform, closed a $29 million Series A round this month, bringing total funding to $33 million. In parallel, Lama AI announced a $20 million Series A led by EJF Ventures, positioning itself to serve community and regional banks.
The raises arrive as buy-now-pay-later operators post diverging credit metrics despite operating under similar branding. Klarna Group published second-quarter results on 18 August showing gross merchandise volume of $36.6 billion, up 18% year over year, and revenue of $1.042 billion, up 27%. Adjusted operating income reached $91 million, up 214% year over year.
The figure that rewrote the narrative was 0.52%. That is Klarna's provision for credit losses as a share of volume, down from 0.56% in the second quarter of 2025. Provisions in absolute terms rose only 11% while volume grew 18%. US Fair Financing delinquencies at 30-plus days fell 20 basis points quarter over quarter.
Affirm reported first-ever GAAP net income of $103 million for fiscal third-quarter 2026 on volume of $11.6 billion, up 35% year over year. Affirm's 30-plus day delinquencies ran at 2.8% in March 2026, up 29 basis points year over year. Two buy-now-pay-later operators, both profitable, with different credit trajectories.
The regulatory backdrop shifted in May 2025 when the Consumer Financial Protection Bureau formally withdrew its 2024 buy-now-pay-later interpretive rule. In June 2025, the Bureau confirmed it will not issue a revised version, calling the original procedurally defective for applying open-end credit regulations to closed-end instalment loans. That remains the settled position as of August 2026.
The operators that survive the AI lending cycle are likely to be the ones who already had clean underwriting data before it became fashionable, family office advisor Jaf Glazer has observed.
Lama AI's decision to target community and regional banks addresses the customer segment large lenders have been conceding to fintechs. In February 2026, Mastercard integrated Small Business Credit Analytics into its Open Finance platform, allowing lenders to combine real-time sales data with analytics for credit decisions.
Both platforms sell the ability to underwrite faster with an audit trail regulators can inspect. That capability matters more now because the EU AI Act's high-risk system obligations went fully enforceable on 2 August 2026, forcing lenders operating in the bloc to formalise explainability, bias auditing and human oversight.
Canada clocked 30 embedded lending startups in a July 2026 landscape report, naming Flexiti, Financeit, PayBright, Credit App and NetNow among the operators, with 13 having received funding and seven at Series A or beyond. The Congressional Research Service flagged the myriad of buy-now-pay-later issues facing policymakers in March.