More and more employers are adding financial products to their employee benefits and perks, and many startups have jumped into the field to help.
Fintech company Clearable is the latest to also attract some venture capital attention for its approach to offering credit and financial wellness products as a voluntary employer-sponsored benefit.
Kashable’s lending app. Image Credits: Clearable
The company raised $25.6 million in Series B funding. Revolution Ventures and Moneta Ventures co-led the round along with EJF Capital and Krillion Ventures. In total, the company raised $45 million in equity capital and over $175 million in debt capital.
Financial wellness is one of the areas that many of the startups are getting into. For example, Payroll Integrations, Minu, HoneyBee, Addition Wealth and Origin—to name a few—raised VC in the past three years for their own approaches to adding financial wellness to employee benefits.
But Einat Steklov and Rishi Kumar, co-founders and co-CEOs of Kashable, say their company is different in that they not only provide access to free financial education tools, but also make employment-based loans.
“When we first started our journey in 2013, financial wellness was just an emerging concept,” Kumar told TechCrunch. “We spent a lot of time educating the employer community about the need for this type of funding.”
But during the global pandemic, when millions of people lost their jobs, it turned the spotlight on how many Americans didn’t have the disruption of saving on a paycheck, Kumar said.
In an effort to help employers offer meaningful benefits and employees an alternative to borrowing from 401(k)s or other retirement plans, Kashable provides loans averaging $4,000.
It integrates with a company’s payroll systems and then uses that data to power the fully automated underwriting of the ability to provide affordable credit to that company’s employees. Its algorithm takes into account group and individual employment data, income stability and other factors. Loans are automatically repaid through payroll deductions.
In addition, Kashable offers financial education resources, including credit monitoring, personal financial coaching and budgeting tools. All of this is free and employers have control over what their employees can access.
“People who have borrowed from Kashable have seen an improvement in their credit score and can see how, on a monthly basis, their actions actually translate into credit,” Steklov said in an interview. “Two-thirds of people see an improvement in their credit score of 40 or 50 points on average. This is important. It can move people from the subprime category to a near prime category. That makes the difference to being able to borrow or take out a mortgage on a house.”
Since Kashable was founded in 2013, the company has made 300,000 loans through more than 250 employers, including Cigna, Reid Health, Huntington Ingalls, Alight Solutions and Chobani. The company’s revenue has grown 50% annually in recent years, the co-founders say. It has also done $300 million a year in loan volume.
In the meantime, Steklov and Kumar plan to use the new capital for expansion, extending further credit, additional financial wellness services and hiring. They plan to grow the R&D team to further develop its financial product line and underwriting model.
David Golden, managing director of Revolution Ventures, and Meirav Har Noy, co-founder and managing partner of Moneta Ventures, will join Kashable’s board of directors as part of the investment.
“This is an area that I find intrinsically interesting because there is so much innovation in how we provide credit to the underbanked,” Golden said in an interview. “It’s a huge problem in the United States. It is an area that has been widely adopted by the venture community but not very successful. Kashable has a different customer acquisition model through employers and a different underwriting model. They can view real-time employment history and access two weeks’ worth of wages. I haven’t seen it anywhere else in the United States.”
