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Exclusive: Paycheck advance startup B9 raises $2.6M

Jul 29, 2022
Illustration of a phone dispensing money.

Illustration: Annelise Capossela/Axios

B9, a startup offering digital banking and payroll advances to the underbanked, raised $2.6 million in new seed funding, the company tells Axios.

Why it matters: With inflation rising and access to credit becoming more expensive and harder to come by, more consumers will be looking for attractive financing options for day-to-day expenses.

Details: B9's new round, which brings total funding in the company to $7.5 million, was led by Sky Light Invest and includes investment from Mbanq and the founders of Wrike.

How it works: B9 leverages employment data and economic behavior to underwrite paycheck advances, positioning itself as an alternative to high-interest credit cards and payday lenders by offering zero-interest advances on future earnings.

  • To qualify, users must share payroll data and set up direct deposits with the platform — but once onboarded, the startup offers mobile banking services and a Visa debit card with 5% cashback rewards.

By the numbers: B9 makes some money from debit-card interchange fees, but most of its revenue comes from monthly subscriptions.

  • These include a $9.99/month plan that lets users access up to a $300 advance and a $19.99/month version that will front up to 100% of their future paychecks.
  • According to B9 founder and CEO Sergio Terentev, the company has grown revenue to $2M ARR in the past 11 months since its launch.

Of note: While the company originally targeted gig workers and the immigrant community, it's made inroads with a broader demographic of young 20- to 35-year-olds, Terentev says.

  • That includes growing from 30% of its user base having full-time employment early on to 60% today.

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