Techstars Seattle grad Fig Loans raises $ 2.6 million for payday loan alternative

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The Loans team Fig. (Photo via Fig Loans)

Fig loans has just completed a funding round of $ 2.6 million for its service which offers an alternative to the payday loan.

The New York-based company raised funding from Access Ventures, Arrow Venture Partners, Tubergen Ventures and Village Capital. co-founder of Bizible Aaron Bird; co-founder of Remitly Shivaas Gulati; and Wharton professor Peter Fader has also invested.

Founded in 2015 and graduated in 2016 from the Techstars Seattle Accelerator, Fig Loans offers “installment loans” to low-income Americans. It offers a lower APR and lower monthly payments than those available with traditional payday loans. The idea is to help people re-enter traditional credit markets.

Fig Loans is testing its product in Texas with United Way, Catholic Charities and Memorial Assistance Ministries. Customers use Fig Loans to help pay for parking tickets; vehicle registration; a professional driver’s license; health insurance deductibles; etc.

Fig Loans CEO Jeffrey Zhu.

Fig Loans generates profits by making referrals to traditional credit partners like local credit unions or Capital One. The income from the loans is intended to cover the costs of operating the business.

“This economic model creates our mission alignment“Said Jeff Zhou, CEO of Fig Loans.” In other words, the higher the credit rating we help our clients achieve, the more valuable our clients are to a traditional lending partner.

Zhou and his co-founder John Li came up with the idea for Fig Loans after meeting at Wharton School. The startup employs six people and will use the new funds to help launch its new product, Fig36, a turnkey loan-as-a-service platform for nonprofits. Zhou called it the world’s first public-private partnership loan program.

Other Techstars Seattle 2016 graduates who raised follow-up rounds included Polly.aI; Shift; Reflect; and Kepler. Another startup, Beam, was acquired by Microsoft.

“The tech industry is often criticized for solving trivial problems or for meeting the 1%,” Techstars Seattle chief executive Chris Devore said in a statement. “I’m incredibly proud of Fig Loans, like his Techstars Seattle predecessor, Remitly, for using technology to solve one of our most important social problems: helping people at the bottom of the income ladder save money. money and accelerate their rise in the middle class. “

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