Get to know these three pioneering Fintech firms that provide services to underserved clients. Not only do these companies have strong business goals and management teams, but they also seek to include those who have been marginalized by society and the financial space in innovative and profitable ways.
Fair is a Los Angeles-based company that has a rather unique concept. This company allows people to lease a car through a mobile app. This is based on the idea that the future of car ownership will be based on a subscription model. Customers can rent a car anytime after paying a lump sum monthly subscription. They can also return a car anytime they like, provided they give a five days’ notice.
The company displays cars from different dealers in the network and customers can choose the cars they like online or at the dealer. And, since it is a lease, it comes with a specific number of miles, which can be added thru the app.
What makes the company even more interesting is that it allows for the rental of used cars. Roughly 15 million cars are sold in the U.S. every year and 35 million used cars are sold. About 70% to 80% of new cars are leases. There are very limited leasing options for cars. In order to purchase a used car, you have to take a loan from the bank or use alternative options.
Fair has flexible leasing program when it comes to used cars. As a matter of fact, they have become Uber’s exclusive leasing partner in the U.S.
According to Fair CEO Greg Ott, “At Fair, the big idea is that we’re not lending consumer’s money. We’re not a credit business. We’re a payments business. This means you don’t have to battle with the dealer, deal with stress/anxiety of handling over a lot of money, or the typical stresses of buying a car.”
Another noteworthy company you should check out is Branch. Branch is a for-profit company created by Matt Flannery that lends to individuals and small businesses. Branch does micro-lending services in Africa and is eyeing to move into India soon after securing $70 million in Series B investment.
Customers can get a loan and build credit history through Branch’s app. A customer’s creditworthiness is evaluated on mobile data based on the customer’s bills payment and bank history. Branch is helping spread the use of phones and the Internet to the microfinance industry, which has heavily underused these tools. To date, the app provides thousands of loans ranging from $2.50 to $500 per day.
Ellevest was founded by Sallie Krawcheck, former CFO of Citigroup. Ellevest has a roboadvisory business and is aimed at investing and empowering women financially. The company also aims to close the gender gap in money and investing, and has created funds specifically designed to help women save up for retirement.
Ellevests’ roboadvisor assesses investors (both men and women) based on financial situation and financial goals and recommends a personalized investment portfolio afterwards. The roboadvisor comes with a digital tier, with no minimum investment and a yearly charge of 25 basis points, and premium, with a minimum investment requirement of $50,000 and charges 50 basis points per year. Ellevest also offers a private health management services for a minimum balance of $1 million.