The last year has been one of financial hardship for billions, and among the specific hardships is the elementary one of paying for utilities, taxes and other government fees — the systems for which are rarely set up for easy or flexible payment. Promise aims to change that by integrating with official payment systems and offering more forgiving terms for fees and debts people can’t handle all at once, and has raised $ 20 million to do so.
When every penny is going toward rent and food, it can be hard to muster the cash to pay an irregular bill like water or electricity. They’re less likely to be shut off on short notice than a mobile plan, so it’s safer to kick the can down the road… until a few bills add up and suddenly a family is looking at hundreds of dollars of unpaid bills and no way to split them up or pay over time. Same with tickets and other fees and fines.
The CEO and co-founder of Promise, Phaedra Ellis-Lamkins, explained that this (among other places) is where current systems fall down. Unlike buying a TV or piece of furniture, where payment plans may be offered in a single click during online checkout, there frequently is no such option for municipal ticket payment sites or utilities.
“We have found that people struggling to pay their bills want to pay and will pay at extremely high rates if you offer them reminders, accessible payment options and flexibility. The systems are the problem — they are not designed for people who don’t always have a surplus of money in their bank accounts,” she told TechCrunch.
“They assume for example that if someone makes their first payment at 10 PM on the 15th, they will have the same amount of money the next month on the 15th at 10 PM,” she continued. “These systems do not recognize that most people are struggling with their basic needs. Payments may need to be weekly or split up into multiple payment types.”
Even those that do offer plans still see many failures to pay, due at least partly to a lack of flexibility on their part, said Ellis-Lamkins — failure to make a payment can lead to the whole plan being cancelled. Furthermore, it may be difficult to get enrolled in the first place.
“Some cities offer payment plans but you have to go in person to sign up, complete a multiple-page form, show proof of income and meet restrictive criteria,” she said. “We have been able to work with our partners to use self-certification to ease the process as opposed to providing tax returns or other documentation. Currently, we have over a 90% repayment rate.”
Promise acts as a sort of middleman, integrating lightly with the agency or utility, which in turn makes anyone owing money aware of the possibility of the different payment system. It’s similar to how you might see various payment options, including installments, when making a purchase at an online shop.
The user enrolls in a payment plan (the service is mobile-friendly because that’s the only form of internet many people have) and Promise handles that end of it, with reminders, receipts and processing, passing on the money to the agency as it comes in — the company doesn’t cover the cost up front and collect on its own terms. Essentially it’s a bolt-on flexible payment mechanism that specializes in government agencies and other public-facing fee collectors.
Promise makes money by subscription fees (i.e. SaaS) and/or through transaction fees, whichever makes more sense for the given customer. As you might imagine, it makes more sense for a utility to pay a couple bucks to be more sure of collecting $ 500, than to take its chance on getting none of that $ 500, or having to resort to more heavy-handed and expensive debt collection methods.
Lest you think this is not a big problem (and consequently not a big market), Ellis-Lamkins noted a recent study from the California Water Boards showing there are 1.6 million people with a total of $ 1 billion in water debt in the state — one in eight households is in arrears to an average of $ 500.
Those numbers are likely worse than normal, given the immense financial pressure that the pandemic has placed on nearly all households — but like payment plans in other circumstances, households of many incomes and types find their own reason to take advantage of such systems. And pretty much anyone who’s had to deal with an obtusely designed utility payment site would welcome an alternative.
The new round brings the company’s total raised to over $ 30 million, counting $ 10 million it raised immediately after leaving Y Combinator in 2018. The funding comes from existing investors Kapor Capital, XYZ, Bronze, First Round, YC, Village, and others.
Jeff Chen has a pithy pitch for his new startup Taste: “We made the Instagram of nice food.”
In other words, just as Instagram made it easy for regular smartphone users to look like talented photographers, Taste makes it easy for customers to prepare impressive meals at home.
That’s because the real preparation is being done by fine-dining restaurants — Chen told me there are 16 Michelin-starred and Michelin-rated restaurants currently on the platform — whose food doesn’t translate easily to a delivery or takeout experience. Taste offers “dinner kits,” which Chen said are neither standard takeout (where everything has been fully prepared but doesn’t necessarily travel well) or a regular meal kit (where “everything is separate and raw”).
Instead, he suggested Taste’s dinner kits are “this in-between thing” where the food is mostly, but not entirely, prepared in advance, allowing customers to “heat and assemble much faster.”
For example, when I tried out Taste last week, my girlfriend and I received three-course meals from Intersect by Lexus and its “restaurant in residence” The Grey. A couple of the (delicious) courses and sides had to be heated in the oven or the microwave for five, 10 or 20 minutes, but there was no real prep or cooking required — the real work was cleaning up afterward.
Even the packaging was impressive (if a little overwhelming), with a large, fancy box for each kit, and then individual packages for each course, plus a separate package for spices. There are optional wine pairings, and some restaurants will also provide plating instructions and a Spotify playlist for the meal.
Taste — which is part of the winter 2021 batch of startups at Y Combinator — is currently New York City-only, where it works with restaurants including Dirt Candy, Meadowsweet and the Musket Room. As you might expect, these kits cost more than your standard dinner delivery. Many of them are in the $ 60-to-$ 100 per person range, although there are also dinners below $ 40, as well as a la carte options.
Chen (who sold his last startup Joyride to Google) said that he and his co-founder Daryl Sew have been excited to help New York City chefs reinvent their offerings for delivery and weather the pandemic.
“We also do a very key thing, which is pre-ordering and batching for the restaurant,” he added. “When a restaurant works with Taste, all the orders come in two days before to the restaurant, and we pick it up at designated times, which helps tremendously with capacity lift.”
And while Taste might seem particularly appealing now, when indoor fine dining options are either illegal, unsafe or transformed by social distancing and mask-wearing, Chen anticipates healthy demand even after the pandemic. After all, he suggested that before COVID-19, there were many people — busy parents, for example, or people who work long hours — who felt like they couldn’t take advantage of these restaurants as often as they wanted, or at all.
“Everything is getting moved into the home,” he said. “Movies are getting moved into the home with Netflix, workouts are getting moved into the home with Peloton and Tonal, and now we’re going to move nice dining experiences into the home.”
Alexa von Tobel has a unique vantage point on the world of startups. She debuted in the tech space with the launch of LearnVest in 2009. The company raised nearly $ 70 million and sold to Northwestern Mutual in 2015 for an estimated $ 250 million, according to reports.
Since, von Tobel has founded her own venture firm called Inspired Capital. Portfolio companies include Finix, Chief, Orum, Habi and more.
But before she was an entrepreneur, or the Chief Digital Officer of a major financial services company (and then Chief Innovation Officer, overseeing the Northwestern Mutual’s venture arm), or the founding partner of a venture capital firm, she was a Certified Financial Planner.
At TechCrunch Early Stage in April, von Tobel will lead a breakout on financial planning targeted specifically at early stage startups.
Take a look:
Finance for Founders
As a founder, you not only have to master your company’s finances, you also have to tackle your own personal finances. Managing your money as a founder comes with a unique set of questions. Leveraging her expertise from LearnVest and as a Certified Financial Planner, Alexa will share financial planning best practices so founders can remove this layer of stress from the pressure of building a business.
Early Stage is back in 2021 and better than ever. The event is centered around all the startup core competencies that founders will need in their tool chest to build successful businesses, from marketing to operations to fundraising.
von Tobel joins an all-star lineup, which includes experts in the fields of sales, seed and A fundraising, recruiting, and much much more. These experts will give presentations across a variety of topics, and then answer questions live from the audience.
The event is split across two days: On April 1 we’ll be hearing from experts in fundraising and operations, and on July 8 we’ll learn more from experts in fundraising and marketing. At both events, the TechCrunch pitch-off will be center stage, giving early stage companies the chance to pitch to and get feedback from seasoned investors. Early Stage is entirely virtual, so folks from anywhere in the world can pick up and ticket and show up from the comfort of their couch.
We sincerely hope you’ll join us!
Popular, highly-scrutinized trading app Robinhood has raised $ 2.4 billion to its balance sheet from shareholders, as first reported by the Wall Street Journal and then confirmed by the company. The private startup raised $ 1 billion on Friday, meaning that it has raised $ 3.4 billion in a handful of days as it seeks to support a flood of retail investors looking to invest in individual stocks on its app – spurred by Redditors investing in GameStop in a effort to frustrate short sellers, in part.
Per Robinhood, the new funds were “led by Ribbit Capital, with participation from existing investors including ICONIQ, Andreessen Horowitz, Sequoia, Index Ventures, and NEA with terms being finalized.” It’s somewhat unconventional to announce a raise that is still being sorted, but Robinhood wants to calm nerves, so shouting about the capital ahead of the paperwork being fully smoothed makes some sense.
The new capital comes at a challenging time for the unicorn, which could pursue an IPO this year – but also a time when it’s enjoying considerable public attention, likely introducing it to many potential new users.
Last week, Robinhood found itself overwhelmed by the demand of new investors looking to invest in meme-stocks such as GameStop and AMC. Robinhood had to temporarily ban trading on these stocks due to stiff financial requirements. As of right now, Robinhood users are limited to buying just a few shares of GameStop and other stocks despite the company haven taken on more capital since the GameStop run began.
TechCrunch emailed Robinhood asking for details of the $ 2.4 billion infusion, curious if it was raised as primary capital, convertible debt that could convert at the time of a public offering, or other mechanism. Update: Robinhood declined to comment on the record. Sources familiar, however, tell TechCrunch that the funds were raised in the form of a convertible note. Forbes initially broke the news that the financing was raised as a convertible note.
“[A]mid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today,” the company wrote in a post.
In other words: Robinhood ran low on capital, which meant it had to limit the frenzy of activity on its app. While the reasons behind Robinhood’s limits were technical, investors largely saw the constriction as a slap in the face in favor of hedge funds. Late Friday, Robinhood released yet another blog post detailing what happened during what some see as a pivotal week in the company’s trajectory.
“Our goal is to enable purchasing for all securities on our platform. This is a dynamic, volatile market, and we have and may continue to take action to make sure we meet our requirements as a broker so we can continue to serve our customers for the long term,” the statement read.
Today’s new capital will likely help Robinhood add some much needed buffer room, to the delight of its customers and investors.