How Salient, an AI loan processing startup valued at $500 million, grew ARR to $25 million in two years

Ari Malik doesn’t spend much time worrying about AI hype cycles. While Silicon Valley debated the philosophy of artificial general intelligence, Malik was building something far more sustainable, prosaic—and profitable—from his bedroom: a system to help repo men and loan officers collect debt. Alongside co-founder Mukund Tibrewala, Malik set out to automate one of the most grueling, regulated, and high-turnover corners of finance.

Two years later, that focus has paid off. Malik is now the CEO of Salient, a vertical AI startup that has quietly become a force in fintech by taking on loan servicing. The company’s software automates everything from collections calls to payment processing for auto lenders, a function historically dominated by call centers and manual workflows.

“This is an area of the economy that has so been left behind by technology, and that consumers are, by and large, left to fend for themselves, that they often don’t know their rights, they often don’t know their processes,” he told Fortune. “And so we thought there’s a huge potential here for AI to be like a 10x solution, rather than a 20 to 30% improvement.”

Salient’s growth has been swift but conservative (at least, in the context of the AI bubble). Just 18 months after inception, Salient raised $60 million in a Seed A round led by Andreessen Horowitz, reaching a valuation of $350 million as of June 2025. Malik told Fortune that Salient’s annualized recurring revenue has now surged past $25 million—nearly double the $14 million figure reported six months ago. Investors have continued to lean in. Insiders say the company has since raised an additional $10 million, pushing its valuation to around $500 million.

There’s no shortage of rapid-rise ARR numbers out there (some of which are more reliable than others). But where Salient stands out particularly, however, is in its retention and churn rate. Malik says the company has never churned a customer and has converted 100% of its pilots into paid deals, even as average B2B churn across the industry approaches 5% annually and, for AI financial tools and fintech, spans from 22% to 76% annually.

AI fintech products have struggled especially with churn due to the regulatory and compliance concerns intrinsic to the industry for which they are created. Salient, Malik says, has managed to instill confidence in financial institutions and clients by demonstrating the model’s proven success. According to Malik, Salient’s AI agents have demonstrated 30 times more compliance than human agents.

This documented success has not gone unnoticed by customers. Salient’s usage retainers are “very high” and its clients, Malik said, are constantly doubling down month-over-month, year-over year. 

The next chapter for Salient, Malik argues, extends far beyond signing more lenders—though Salient already works with more than five of the top ten auto lenders. The company is now processing millions of calls per day, and has already processed more than $1 billion in transactions, a signal of both demand and the scale of the problem it is targeting. Each year, roughly $800 billion in new auto debt is issued in the U.S., and nearly 80% of U.S. households have some debt. Lenders spend an estimated $20 billion to $30 billion just servicing that debt, paying humans to make phone calls, send letters, and negotiate payments, according to Malik.

Salient’s ambition is to capture that spend by becoming what Malik calls the “autonomous system of record”—software that can manage the entire lifecycle of a loan, from origination to payoff, without human intervention.

“We think making servicing a fully touchless process is on the table, and we want to get to it as fast as humanly possible,” Malik says.

Reaching that goal means expanding beyond Salient’s core collections product. Malik says the company plans to build a loan management system, a credit reporting module, and a charge-off module, effectively broadening Salient into a full-stack servicing platform. The existing product, he adds, has already proven its value: clients have seen servicing cost efficiencies of 50%.

Malik says the way Salient deploys its capital is guided by customer trust. “We need to be a generational company, because they invest a lot in us, and we need to make sure that we are stable financially,” he told Fortune. “And so when we invest capital, it’s because we have a really strong conviction that this is a product that could work at scale, and we want to make this realize value as fast as possible.”

The company, he said, has no desire to burn through cash quickly in the coming years. And Salient’s operating costs are much smaller than foundational AI companies because the firm doesn’t engage in pre-training. 

Instead, investments will go toward adjacent workflows, including how lenders interact with the DMV and how they perfect loan recovery processes. Another portion will be reserved for experimentation with new technology—something that has defined Salient since its earliest days.

When Malik and Tibrewala launched Salient in 2023, nearly every lender they pitched dismissed them. To break through, they ran an unconventional Turing test. The founders built a demo in which an AI voice clone of Steve Jobs called lenders to negotiate an auto loan.

“We picked Steve because it was the most recognizable voice,” Malik says. “We wanted to make it illustrative that this tech is getting so lifelike that it’s just a matter of time before it becomes the status quo.”

The stunt worked. “Our first five or six customers, we just played them that demo,” Malik says. “They were all like, ‘Oh my god, this is crazy.’”

Winning deals, however, was only the first hurdle. Salient’s first major client was Westlake Financial, a large subprime auto lender. When Westlake agreed to a pilot, Malik and Tibrewala didn’t just ship an API. They physically moved into Westlake’s offices, setting up desks onsite to ensure the AI didn’t hallucinate or violate complex debt-collection laws.

That level of “rabid customer obsession,” Malik says, is Salient’s moat—a mindset he traces back to his time at Goldman Sachs and later at Tesla. Engineers are embedded directly with customers, and every Salient partner has Malik’s personal cell number. “Our engineers directly interface with their business counterparts at the largest financial institutions in the U.S.,” he says. “They’re much more responsible to what they promised a customer, which creates a much more aligned engineering world. We all know what we need to build and how we need to do it.”

For founders hoping to replicate Salient’s success, Malik’s advice is pointed: leave Silicon Valley. “Go anywhere else,” he says. “Talk to anybody in a different industry. Become an anthropologist. Embed yourself in a community you don’t know—and you’ll find these super ripe inefficiencies.”

This story was originally featured on Fortune.com