Financial health startup SeedFi, which helps Americans build credit, save money and make future financial plans, has raised $65 million in funding, according to a press release. The amount comprises $50 million in debt and $15 million in equity.
The $15 million Series A round was led by Andreessen Horowitz, with participation from Flourish Ventures, Core Innovation Capital and Quiet Capital. Andreessen Horowitz General Partner Angela Strange will join the SeedFi board of directors, and Flourish Ventures Managing Partner Emmalyn Shaw will join as a board observer, the release stated.
The company is launching with two programs. One is the Credit Builder Plan, which will help people create good saving habits by saving as little as $10 per paycheck, which is reported to the credit bureaus to help boost scores, the release stated.
The other, according to the release, is the Borrow & Grow Plan, a digital finance product that gives users access to funds immediately while also helping build savings and credit, intended to help reduce endless debt.
“We’ve seen firsthand how the system has been designed for underprivileged Americans to fail,” said SeedFi Co-Founder and CEO Jim McGinley. “Our average customer earns $50,000 a year, yet they pay $460 a year in overdraft fees, and payday loan companies charge them APRs of 400 percent or more. They barely make enough to cover their expenses, and any misstep can set them back for years. Our goal is to address the root cause of the problem and leave our customers better off than we found them, so we’ve structured all of our products to generate savings and build credit. The end goal is to help alleviate that stress and allow people to make progress towards a better future.”
Financial literacy hasn’t historically been a strength of Americans. PYMNTS reported on a GoBankingRates financial literacy survey in which only 3 percent of respondents were able to pass.
In addition, a PYMNTS survey last year found that 45.4 percent of respondents had $2,500 or less in savings, while 15.6 percent had nothing at all.