Salesforce chief Marc Benioff and PayPal Ventures are joining the latest funding round for Oakland-based start-up Even, which aims to provide a better alternative to payday loans.
Why it matters: Historically, those who need an advance on their pay often have few options and pay extremely high fees and interest rates.
Details: Even says it isn't disclosing how much it raised, saying it wants to focus not on the amount, but who is aligning themselves with the company.
- The service now has more than 550,000 monthly active users, many from initial customer Walmart, though it has signed other unnamed large companies as well.
How it works: As we first wrote last year, Even is a subscription service that employers can offer to workers (either subsidized or not) to let them track their wages, begin saving and, when necessary, get some of their pay a bit early.
- It charges the same amount per worker per month (roughly $6 to $8) whether they get a payday advance or not. CEO Jon Schlossberg told Axios the goal is to get people to start saving, noting 90% of people save virtually nothing each month. The advances on earned pay are meant so users without savings don’t dig themselves into a deeper hole.
- "We don't trap you in a cycle of relying on it as can happen with many of the other products in that space," Schlossberg said. "People think it's too good to be true. That really is a scathing review of the financial services industry."