On Tuesday, Seattle-based fintech startup Possible Finance announced that it raised $11 million in a Series B funding round led by Union Square Ventures. In addition, the company also raised $80 million in debt financing from Park Cities Advisors.
Possible aims to provide loans up to $500 to people regardless of their credit history. Unfortunately, lenders often take advantage of people with bad credit scores or no credit history. This could come in the form of high interest rates or harsh punishments if the borrower misses a payment. That’s because people with poor or no credit are usually labeled as “risky” by financial lending institutions, and those institutions want to find ways to hedge their bets and profit off their loans. But this is at the expense of the borrower, who is underserved by financial institutions and often desperately needs the money.
Possible doesn’t look at a person’s credit score when giving out loans. Instead, it looks at transaction history for a person’s bank account and uses machine learning to decide if that person should be approved for a loan. If the person is approved for the loan and then pays it off, that in turn helps them build their credit and potentially get more loans in the future.
“So many people who live paycheck to paycheck can’t afford to build credit history. We’re helping them do it for the first time while providing them with a friendlier and more affordable small-dollar loan,” Possible CEO Tony Huang said in a statement.
The company has provided loans to hundreds of thousands of customers to date.
This new round of funding will help the company develop more products and services for its customers, as well as help the company expand. The Seattle company went fully remote this year due to the COVID-19 pandemic, but since then it has embraced its distributed workforce. Over the past few months, Possible has hired software engineers from across the country and around the world. The company has already doubled its employee headcount over the course of 2020.
It plans to continue this expansion by hiring more people for remote roles, regardless of their current location. It currently has open job listings for roles in engineering, operations, product and finance.
“Being fully distributed allows us to access the talent pool of the entire world. Our success so far is a reflection of the quality of our people, and we believe hiring globally will allow us to find exceptional people to join us in achieving our mission,” Possible CTO Tyler Conant said in a statement.