Exclusive: Split Pay raises $125 million for rent and mortgage lending
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Split Pay, a lending startup initially focused on renters, tells Axios that it's raised $125 million in Series A and Series B funding. Khosla Ventures led both rounds, joined by Thrive Capital and Max Levchin.
Why it matters: It's an effort to make the consumer economy work more like the invoice-based business economy — which recognizes that income can be lumpy — by reconciling the timing discrepancy between large bills (once per month) and paychecks (twice per month).
- It's also a BNPL-style bet that AI can be used to expand underwriting without also expanding losses.
How it works: Split Pay lets renters or mortgage holders pay their entire bill on the due date, but floats up to 50% for up to 30 days.
- It charges 2% of the entire bill, plus a $10 monthly "subscription" fee, but doesn't charge late fees or interest. If someone ultimately doesn't pay, they no longer can use the service.
- Split Pay also can be used for other types of large expenses, including student loans and car payments, and claims to have around one million members (with a quarter of them using it monthly). It also soon will launch a credit card with Visa, featuring a low APR and no rewards program.
Deal breakdown: Split Pay initially raised $15 million in seed funding in 2023, before scoring $25 million for its Series A round last fall and then around $100 million for the Series B (which might still grow a bit).
What they're saying: "We believe that AI is going to blow up underwriting, so we spent our first two years like a lab building a new foundation model focused on people under 40," says co-founder and CEO Andrew Borovsky, a former Block/Cash App executive.
- "What we found was that our average consumer had $90,000 of income and generated around $2,100 in cashflow, but was still struggling and living paycheck-to-paycheck. The biggest reason was the timing of bills."
