FloatMe announced Monday it has closed $16.2M in Series A funding to help fuel the fast-growing fintech startup’s expansion. Led by Foundry Group, the funding round had participation from ManchesterStory, San Antonio-based Active Capital, Samsung Ventures, and notable fintech leaders including Michal Cieplinski from Pipe, Jordan Wright from Atomic, and John Henry from Loop.
“The commitment and focus that FloatMe has towards solving a very real problem for millions of Americans and serving their members in ways that support their immediate and longer term needs really resonated,” said Seth Levine, Managing Director at Foundry Group. “Coupled with their impressive growth since launch and their thoughtful and differentiated product roadmap, we couldn’t be more thrilled to have them in our portfolio.”
FloatMe gives employed customers an advance on their paycheck quickly, easily, and at much lower interest rates than typically found at payday lenders. The app’s balance monitoring service and educational features also help clients save money for emergencies.
“We set out to help people who were drowning in debt. Delivering a brand, experiences and products that, without compromise, prioritizes our members best financial interests allows us to continually demonstrate our commitment to solving that problem,” said Josh Sanchez, FloatMe co-founder and CEO.
Even before the pandemic, many Americans were living paycheck to paycheck. The spread of COVID-19 has only exacerbated that trend. Nearly 25% of people in the U.S. lack savings for an emergency. With no alternative but to resort to expensive payday lending, a $46 billion payday industry often traps users with interest fees up 510%.
Sanchez said FloatMe has helped save Americans $80M in overdraft fees since its official launch in March 2020. Sanchez, chief of operations Ryan Cleary, and chief technology officer Chris Brown first launched the FloatMe app in 2017 as a way for workers to get a “float” or short-term advance up to $50 on their next paycheck without paying hefty fees or interest.
The founders knew launching a financial lending services company would take considerable working capital. The funding will help support the expansion of its team, products, services as well as continuing to help build the FloatMe community. Since its official launch, the San Antonio-based company has added 45 employees and significantly grown its member base.
As so many continue to cope with the impacts of the Covid-19 pandemic, the company also launched its new brand Monday with an updated logo and messaging on FloatMe’s alternative financial services.
“We set out to help people who were drowning in debt,” Sanchez said. “Delivering a brand, experiences and products that, without compromise, prioritizes our members best financial interests allows us to continually demonstrate our commitment to solving that problem.”
The featured image is of FloatMe co-founder and chief executive officer Josh Sanchez. Courtesy photo.