As a teenage model, Katrin Kaurov became financially independent at a young age. Aleksandra Medina, whom she met at NYU Abu Dhabi, also learned to manage money early on. The pair bonded as students over what they saw as a lack of space for open conversations for people their age around financial wellness.
So they teamed up in 2021 to launch based in New York Fritza startup that aims to act as a social financial community for the Gen Z population.
The premise behind the company, they say, is that Gen Z is tired of authenticity. Unrealistic depictions of financial success appear all over social media and leave people wondering how they really compare to their peers financially, Kaurov and Medina say.
“We realized that Gen Z has no idea what to do with money and we’re all pretending on social media that we have our lives together when we really don’t,” Kaurov told TechCrunch in an interview. “Are they overdrafting or are they actually living these luxurious lives? We just felt that there was a really strong disconnect between what’s showing up online and what banks and financial institutions are offering that Gen Z really wants.”
Users of Frich – which stands for “Effing Rich” – are able to ask questions anonymously on the app to better understand how others their age are doing financially without feeling competitive. They can also share anonymized financial data to see how they compare to their peers. For example, a college freshman can see what others with a similar background are spending on entertainment, investments, and rent. Questions users might ask include, for example, How much do people my age invest? Do my classmates have allowances?
“I think one of the things that makes Gen Z really different than any other generation is that Gen Zers want to talk more about money,” Kaurov said. They want to be open and honest about the reality of what’s really going on, like how much people are really spending, what people’s credit scores are, and what they’re spending on a first date.”
And for those looking for help improving their situation, Frich is ready to take the data collected from users and connect them with relevant financial brands.
“Frich works primarily as a community-based money app,” Medina said. “And our personalized approach really aims to address Gen Z industry oversight. We can then leverage our understanding of user data and match those Gen Zers with the right brands and services.” His goal, he added, is to anticipate their needs before they even arise.
The duo launched their app in the summer of 2021 and since then, it has grown to over 100,000 Gen Z users nationwide, with the main markets being New York, Florida and Texas. Frich is approaching $1 million in annual recurring revenue (ARR) with a B2B subscription model.
Frich makes money by partnering with banks and brands, such as a credit builder or lifestyle brand, and charging them a flat fee to be on its platform. This fee varies by partner.
Interestingly, the company has adopted an old fashioned approach to marketing by visiting campuses nationwide and using ambassadors to advertise its offering in addition to promoting the app on digital platforms like TikTok.
Today, the six-person startup is announcing that Frich has raised $2.8 million in a seed funding round led by Restive Ventures, which included participation from TruStage, K20 and Spartan Innovations. The money so far is being used in part to make major hires, including a former Bumble employee to lead development and an early Robinhood employee to work on products.
Cameron Peake, a partner at Restive Ventures, told TechCrunch that her firm believes Frich “has her finger on the pulse of how Gen Z thinks and acts around money issues” and has the potential to become a “massive” company.
“They send out very regular polls, for example, to debunk some of that and that really excited us,” Peake added. “The consumer market is so broad, they can grow quickly.”
Of course, Frich isn’t the only fintech aiming to serve the expanding Gen Z market. In January, Alinea Invest, an AI-powered wealth management fintech app aimed at Gen Z women, raised $3.4 million in pre-launch seed funding for an AI virtual assistant to help users with their investment needs. And Bloom, a zero-fee stock investment tool for teenage investors, came out of stealth last July, announcing that it had reached 1 million downloads after launching in February 2022. Meanwhile, in March, Onyx Private, based in Miami, a Y Combinator-backed digital bank that provided banking and investment services to high-earning millennials and Gen Zers, has announced it is ending its banking operations and shifting to a B2B model.
Want more fintech news in your inbox? Subscribe to TechCrunch Fintech here.
Want to get in touch with a tip? Email me at maryann@techcrunch.com or send me a message on Signal at 408.204.3036. You can also send a note to the entire TechCrunch crew at tips@techcrunch.com. For more secure communications, click here to contact uswhich includes SecureDrop (instructions here) and links to encrypted messaging applications.
