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Kevin Durant-backed wage-access company Brigit hits $100M in revenue

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Apr 25, 2024
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Illustration: Natalie Peeples/Axios

Brigit, a cash advance and credit building startup backed by NBA-star Kevin Durant, hit over $100 million in revenue and reached profitability last year, the company tells Axios.

Why it matters: The company's track record highlights the demand for earned-wage access products, as well as the growing regulatory scrutiny of the space.

How it works: Brigit makes about 90% of its revenue from subscriptions, charging users $8.99 to $14.99 a month for access to its budgeting app, a credit building product, and cash advances to eligible customers ranging from $50 to $250.

  • The company doesn't charge additional interest for those advances.
  • Using cash-flow data, Brigit says, it can personalize the experience, automatically sending customers tips to reduce a bill if it suddenly shoots up. If the user agrees, Brigit can also predict and prevent overdraft fees by fronting capital into an account.
  • The remaining 10% of revenue comes largely from affiliate links to insurance products, or to side gigs such as DoorDash or Survey Junkie.

Driving the news: The company's revenue grew 90% last year, to over $100 million, CEO Zuben Mathews says. It expects to grow revenue 50% this year and maintain profitability.

Between the lines: The company was profitable both on a EBITDA and net income basis in 2023. But when accounting for the $18 million settlement with the FTC, the company would have posted a net loss.

  • In that November settlement, Brigit agreed to pay that amount to customers after the FTC alleged that Brigit had trapped consumers into the subscriptions and published misleading advertising.
  • According to the FTC, the cash advances seemed easily accessible based on Brigit's advertising, when in reality consumers were "rarely able to get an advance for the promised $250." Consumers were also not able to cancel the subscription if they had any outstanding balance, regulators alleged.

What they're saying: "We do fundamentally disagree with the allegation and, quite frankly, some of the facts, but we settled," says Mathews. But he notes that the company has made the changes to how the company advertises and cancels subscriptions, based on the FTC order.

  • The $18 million settlement also did not affect loans given in 2023, he says.

Zoom in: Earned-wage access companies like Brigit say they have noble intentions of helping those who live paycheck to paycheck. On median, Brigit's customers make about $50,000 a year.

  • But that's garnered attention from regulators, who worry the industry will take advantage of some of the country's most vulnerable consumers. That's led to scrutiny and created confusion at companies over what products are compliant.
  • So far, regulation has been a patchwork, with states differing on whether such earned advances should be considered loans and, therefore, subject to more onerous regulation. The CFPB, meanwhile, has signaled it plans to issue its own guidance.
  • Complicating the issue: EWA providers also have differing business models, with some selling through employers and some directly to consumers.
  • Brigit has argued that it is not a lender.

State of play: Brigit has raised $25 million in equity overall from investors including Lightspeed Venture Partners and Durant's Thirtyfive Venture. It last raised in 2019.

  • When asked why the company didn't try to raise during the pandemic era, Zuben said: "It was a mistake not to raise more."
  • The company had planned to raise in 2022, but markets soured. Now, the company may consider a fundraise "depending on how the equity markets are."
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