The Future Of Personal Finance: Fintech 50 2022

The Future Of Personal Finance: Fintech 50 2022

Samir Goel and Abbey WemimoESUSU

Reported by Isabel Contreras and Jeff Kauflin

Pandemic uncertainty, followed by stimulus cash boosts and now, skyrocketing inflation, has made young folks more conscious of their finances—and financial standing—than ever before. So it’s fitting that half of the eight personal finance startups honored on this year’s Fintech 50 list (and two of the four personal finance newcomers on the list) aim to help Americans who are living paycheck to paycheck or have thin (or even poor) credit histories, to get their financial footing.

Newcomer Grow Credit issues users a virtual credit card (no plastic version), which can be used to pay monthly recurring subscriptions and then gets paid automatically from their linked bank account. Those regular on-time payments get reported to the credit bureaus, which in time helps a user build their credit score–crucial to getting a regular credit card and good rates on car and home loans. Grow charges a monthly fee as does another newcomer, Brigit, whose credit builder loan is linked to a savings account, which assures timely payments will be made and reported to the credit bureaus. Another Brigit feature aims to help users avoid both overdraft fees and expensive payday loans by linking to their bank accounts, monitoring cash flow, and making a small, interest-free cash advance, when needed.

Two returning list honorees also focus on helping folks join the financial and credit mainstream. Esusu reports rental payments to credit bureaus, so individual renters can build their credit standing with on-time monthly payments—just the way homeowners do. Propel’s mobile app helps users keep track of their food stamp balances and other government benefits, and it offers a free debit Mastercard for users to manage their benefits and earnings from work in one place.

Of course many Americans are doing well financially and are ramping up their spending on travel and other out-of-home experiences foregone earlier in the pandemic. That’s where another Fintech 50 newcomer, travel booking app Hopper, comes in. Besides commissions, it is bringing in revenue with a novel program that lets customers pay an extra fee—usually 10% to 20% of a ticket’s price—to freeze a flight’s price for up to a week. If the fare rises and the customer buys the ticket, Hopper eats the difference–particularly appealing in these days of full flights and soaring airfares.

The two most valuable companies in the Fintech 50 personal finance category are Chime, America’s largest digital bank, valued at $25 billion, and upgrade, a newcomer to the list, valued at $6.3 billion. It offers several novel products, including credit cards that can be paid off as if they were short term loans, with a set interest rate and pay date, eliminating the risk of accumulating compound interest. Together, all honorees in this category are worth $38.8 billion.

Here are the eight personal finance startups that made the Forbes Fintech 50 list in 2022.

Brigit


Financial app aimed at helping Americans living on the edge build up their money management skills and credit scores, while avoiding bank overdrafts and traditional payday advance loans. The $9.99 a month subscription service links to a user’s bank account and based on their cash flow approves them for an interest free loan of $50 to $250. It also uses machine learning algorithms to automatically extend that loan if needed to prevent bank account overdrafts. (Only one loan is allowed at a time.) Brigit’s credit builder feature links a term loan with a savings account which is used to ensure timely loan payments–those on-time payments get reported to the credit bureaus and can boost users’ credit scores by as much as 60 points, Brigit says. A free version of the app provides advice, but no loans.

Headquarters: New York, New York

Funding: $37.5 million from Lightspeed, DCM, NYCA and others

Latest valuation: $140 million

Bona fides: Almost half a million paying users, plus over three million accounts using the app’s free features.

Cofounders: CEO Zuben Mathews, 42, a Delhi native and University of Chicago grad who was an investment banker with Deutsche Bank for a decade; CTO Hamel Kothari, 28, a member of the 2021 Forbes 30 Under 30 list.

Chime


The largest digital bank in America, Chime gained the following by offering free checking accounts and no overdraft fees. In 2021, big banks like Chase and Bank of America lowered overdraft fees, likely a reaction to competitive pressure from Chime and other digital banks. Chime had planned to go public in early 2022, according to a person familiar with the matter, but delayed it amid a rocky stock market. CEO Chris Britt says Chime attracted more new customers in the first quarter of 2022 than any quarter in the company’s ten-year history.

Headquarters: San Francisco, California

Funding: $2.3 billion from DST, Sequoia, Coatue and others

Latest valuation: $25 billion

Bona fides: 13.2 million app downloads in 2021 compared with 11.1 million in 2020, according to Apptopia.

Cofounders: CEO Chris Britt, 49, who did previous stints at Green Dot and Visa; CTO Ryan King, 45.

Esusu


Helps renters build their credit for free by reporting on-time rent payments to credit bureaus. Landlords pay for this service because it increases on-time payments, reduces evictions, makes more renters stay in units long-term and maximizes property managers’ ESG reporting. A new partnership with Freddie Mac makes Esusu’s product more attractive: the mortgage company provides closing cost credits on multifamily loans for owners using Esusu.

Headquarters: New York, New York

Funding: Over $144 million from SoftBank Vision Fund 2, Motley Fool Ventures, Next Play Ventures and others

Latest valuation: $1 billion

Bona fides: Over 3 million registered rental units and more than 140 property manager clients, including Progress Homes and Goldman Sachs.

Cofounders & Co-CEOs: Abbey Wemimo, 30, a Nigerian immigrant; Samir Goel, 28; Each had nonprofit experience before starting Esusu.

Grow Credit


Issues novel “virtual” Mastercard for those with thin or no credit history looking to boost their credit scores. The card, which charges no interest (but carries a monthly fee of $2 to $8), can be used to pay recurring subscriptions like Netflix and Spotify and is linked to the user’s bank account for automatic on-time payments that build a credit history, boosting credit scores as much as 50 points, Grow says. Later this year, it plans to launch a more conventional physical credit card with a 15% to 18% interest rate that users can “graduate” to.

Headquarters: Santa Monica, California

Funding: $11 million from Mucker Capital, Commerce Ventures and Arena Investors

Latest valuation: $26 million

Bona fides: 52,000 customers, up from 8,000 at the end of 2020.

Founder: CEO Joe Bayen, 46, a serial entrepreneur whose startups include an iPhone app discovery marketplace that attracted 12 million users called Free App A Day.

Hopper


Travel booking site launched in 2014 as a free app that predicted the cheapest time to book a flight, it now offers additional features, such as home rentals and a novel program that lets customers pay an extra fee—usually 10% to 20% of a ticket’s price—to freeze a flight’s price for up to a week. If the fare rises and the customer buys the ticket, Hopper eats the difference. Today, these new fintech products make up 40% of Hopper’s revenue, with the rest coming from traditional commissions paid to travel agents. Nearly half of its employees are US-based.

Headquarters: Montreal, Canada

Funding: $580 million from Omers Ventures, Capital One, GPI Capital and others

Latest valuation: $5 billion

Bona fides: $150 million in 2021 revenue, up from $40 million in 2020; app has 70 million lifetime downloads.

Cofounders: CEO Frederic Lalonde, 48, who dropped out of college at 19 and started a travel data startup that Expedia bought in 2002; former head of B2B engineering Joost Ouwerkerk, 50.

Propel


Its Providers app enables low-income families receiving government benefits such as SNAP (food stamps), rental assistance and TANF (cash payments) to manage those benefits alongside their income and their overall finances. Propel issues a free debit Mastercard for users’ cash benefits and (food stamps have their own government card), generating revenue from card interchange fees and from marketers who pay to promote affordable products, such as low-cost Wi-Fi and cell plans , on the platform.

Headquarters: New York, New York

Funding: $85 million from Nyca, Andreessen Horowitz, Kleiner Perkins and others

Latest valuation: $520 million, according to PitchBook

Bona fides: More than 5 million users; more than doubled revenue last year to $24 million.

Cofounders: CEO Jimmy Chen, 34, left a product manager position at Facebook to start Propel; COO Jeff Kaiser, 32; CTO Ram Mehta, 36.

Tala


Makes loans of $10 to $500 to customers with little or no formal borrowing history in the Philippines, Mexico, Kenya and India, using their smart phone data to judge risk. In December 2021, Tala released a digital savings account that has attracted nearly 100,000 users. Historically, Tala has relied on large institutional investors to fund its loans, but it is planning to launch a new model in late 2022 that uses a “decentralized finance” cryptocurrency platform, which will let professional investors pool money to fund Tala customers’ loans and earn a return.

Headquarters: Santa Monica, California

Funding: $350 million from Upstart, Stellar Development Foundation, RPS Ventures and others

Latest valuation: $800 million

Bona fides: Lends $70 million a month to customers, up from $60 million a year ago; has six million total registered users and 1.5 million monthly active users.

Founder & CEO: Shivani Siroya, 40, who founded Tala after studying the impact of microcredit in sub-Saharan and West Africa for the UN

Upgrade


The six-year-old personal loan fintech offers a credit card (paying 1% to 3% cash back) that also functions like a personal loan: you can get a credit line ranging from $500 to $25,000, have a fixed deadline to pay it off and can make payments in equal monthly installments. Theer recently launched a bitcoin rewards lend card and a no-fee checking account that gives users 2% cash back on everyday purchases.

Headquarters: San Francisco, California

Funding: $600 million from Coatue, DST, Ribbit Capital and others

Latest valuation: $6.3 billion

Bona fides: In 2021, it is more than quadrupled annual revenue over the prior year, reaching $410 million.

Cofounders: CEO Renaud Laplanche, 51, founder and former CEO of online lender. LendingClub; CFO Jeff Bogan, 42; SVP Adelina Grozdanova, 38; SVP Matt Wierman, 50; CIO Visar Nimani, 47.

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