As it turns out, the market for their technology-infused service went beyond payday loan users.
The Seattle startup has raised an additional $ 4.3 million from existing investors to help fuel the growth of its mobile-only lending program.
What Possible Finance does: The company offers loans of up to $ 500 and is similar to payday lenders, but with crucial differences. Borrowers have more time to repay the money in installments, and repayments are reported to credit agencies, which helps people rebuild their credit. Traditional payday loans are structured differently, so these payments do not count towards credit scores, which helps trap consumers in an expensive borrowing cycle.
Huang said the vast majority of the company’s applicants are in fact not payday loan users.
“By being more accessible and reporting to credit bureaus to help users build credit histories, we are destigmatizing small dollar loans and expanding financial access to a much larger audience,” Huang told GeekWire this week.
Using the Possible Finance app, people can apply for loans without a credit check and receive funds the next day. Possible Finance connects to a customer’s bank account and uses machine learning to analyze financial transaction data to make credit risk decisions rather than relying on FICO credit scores.
Traction: Since launch in April 2018, the company launched 13,000 loans and has 50,000 users on its waiting list. Its revenue grew 50% month over month and recently hit a milestone of $ 1 million in annual revenue. Huang said he saw a “clear path” to profitability.
Possible Finance has just been launched in California; it also serves clients in Washington, Utah and Idaho. The company has nine employees and plans to double its workforce this year.
Investors: Unlock Venture Partners, the new micro-VC firm co-founded by Seattle angel investor Andy Liu, led the new round with Columbia Pacific Advisors. Other existing investors include FJ Labs, Seattle Bank, Hustle Fund, Union Bay Partners, and various angel investors. Total funding to date is $ 6 million.
“We are incredibly excited to continue our investment in Possible Finance and to double the team,” Liu said in a statement. “Obviously through the thousands of satisfied customers, they have demonstrated a clear fit with the product market and an extraordinary ability to execute their vision of improving financial access for middle-class Americans. “
Founding team: Huang and his co-founders – Prasad Mahendra, vice president of engineering, and Tyler conant, CTO – previously worked together at Axon, the leading manufacturer of non-lethal stun guns and police software and supplies, including on-board cameras and body cameras. This experience instilled in them a passion for the development of technologies in the service of social good. As part of his role as Product Manager at Axon, Huang has accompanied police across the country, giving them insight into inner city areas and reinforcing their commitment to helping underserved communities.
Huang was nominated last year in the Young Entrepreneur of the Year category at GeekWire Award.
Possible Finance recently hired Sanchit Arora to lead its data science team. Arora was co-founder and CTO of Dextro, a machine learning startup acquired by Axon in 2017.
“Possible Finance’s new approach to using transaction data has the potential to become the norm for consumer credit risk and potentially replace the existing credit scoring system,” Arora said in a statement.