Jesse Chor grew up going with his grandfather and uncles to Montreal’s Chinatown to join the tanda collective. It is an informal peer-to-peer savings and lending network within a community of family, neighbors and friends.
The idea, deeply rooted in Mexican culture, has been around for centuries. Chor asked his grandfather why he was using a tanda and his answer was that as an immigrant he did not have access to traditional banking services, loans and credit. Tada supported his grandfather and others through everything from unexpected expenses to starting their own businesses, Chor told TechCrunch.
His memories stuck as he went into the working world, and while at Yahoo (full disclosure: TechCrunch’s parent company), he was tasked with building a version of a tanda in 2018. What stood out to Chor, however, was that he could have used something like when he was working minimum wage jobs.
“Not only that, I feel like everyone I worked with in those places could have,” Chor said. “It’s really about helping the community support each other, empower each other and uplift each other by making money more accessible.”
Adapting the approach to small businesses
Yahoo’s tanda product sold out after about six months, according to Chor, and he left Yahoo in 2019 to start his own company. Two companies later, he kept thinking about the idea. When he learned of the well-known statistic that the majority of Americans would find it difficult to handle a $400 windfall, he knew who his third company should be.
He started Tada, the platform it builds that provides financial resilience and community bonds through collective savings. Tanda uses the Rotating Savings and Credit Association model and goes a step further to offer the service to small businesses as a way to retain employees, reduce turnover and minimize burnout.
“We work with small business owners and they offer this as a benefit to employees,” Chor said. “There’s already a microculture, if you will, so we can connect better with each other.”
How does it work
In a traditional tanda, one person takes the lead in collecting the money and maintaining an accounting system for lending that money. Chor’s approach is to leverage technology to take on this job.
Business customers advertise Tanda with employees, who scan a QR code and gain free access to the product. Instead of variable dollar amounts, they are fixed increments, and users can start at $100 and borrow up to $2,500.
Tanda then charges fees based on payment position within a circle of people. For example, those who are first or second to receive a payment will be assessed a fee of approximately 10% or 8%. Those in the middle will be free or could receive a reward, Chor said. He is also getting interest from employers who want to sponsor the product to cover the fees.
“One of the secrets about tandas is, historically speaking, they have very low default rates, just under 2 percent,” Chor said. “The reason for this is really community and the camaraderie of adults and social responsibility.”
Next steps
Tanda is still in its early stages, working with a small group of restaurants and managing a few hundred thousand dollars as it builds its waiting list.
Meanwhile, the company closed on $4.5 million in seed funding from Initialized Capital and Arc, Sequoia Capital’s pre-seed and early-stage catalyst. Chor intends to use the funding to scale the business and hire additional employees.
“We want to help employers offer more than just money, but how to build a community and trust within the team so they can perform better,” Chor said. “For us, that’s really the next step — unlocking that capability in our product.”
