A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

“Even,” An Interest-Free, Mobile Alternative To Payday Loans

Image even-app-hand.png

A startup whose first product is a mobile money management application called Even, designed to offer low-income workers interest-free credit to help them make ends meet in between paychecks, has raised $1.5 million in a seed round led by Keith Rabois of Khosla Ventures, with participation from other investors. The service is meant to offer hourly, and generally part-time workers an alternative to riskier payday loans and other lending products where debt compounds, making it even more difficult to recover from life’s curveballs.

Other investors in the round included Homebrew, Kevin Systrom, Mike Krieger, Michelle Wilson (former general counsel of Amazon), David Tisch, Adam Rothenberg, Sam Lessin, Slow Ventures, Red Swan, Andrew Fine, Zach Brock, Joe Ziemer, Andrew Kortina (Venmo).

One of the worst injustices about the income inequality situation in the U.S. is just how expensive it is to be poor. Setbacks that others would consider inconveniences can actually ruin your life, explains author Linda Tirado, in her book “Hand to Mouth: Living in Bootstrap America,” which details what it’s like to live in poverty as low-wage worker. In one story, she explains how a minor annoyance to most of us – getting her car towed – ultimately cost her both of her jobs, and soon after, her apartment.

Unfortunately, much of the consumer-facing technology emerging from Silicon Valley is focused on serving the needs of the better-off, where just about anything can now be ordered on demand from groceries to black cars to even manservants or just cookies. There’s definitely growth potential in portions of this market, as Uber-watchers could tell you, but the companies that emerge don’t always meet the needs of the many.

According to the U.S. Census Bureau, 45.3 million live in poverty in the U.S. in 2013. Nearly half of Americans in major cities live in a state of financial insecurity, and many turn to alternative – and often predatory – lending services when times are tough.

Even also reports that there are now 51 million in America who spend an average of $1,000 per year on things you “pretty much get for free at a bank.”

The company’s big idea? To offer consumers interest-free credit that helps them during bad weeks. The way the product works is not at all like payday lenders, though they’re targeting the same market. Customers using Even will authorize the company to manage their money for them. During good weeks, it sets a little money aside on your behalf, then, during the not-so-good weeks, users can tap into credit to pay their bills, or deal with whatever other expenses come up.

The program, available to consumers via a mobile app, is still in pilot testing, meaning a lot of the finer details are still being worked out. However, the end result is that customers receive a steady paycheck of the same amount from week to week, even as they work more hours some weeks, and fewer on other weeks.

The service works with a customer’s own bank account, and offers a number of features including automatic budgeting, help for emergency expenses, and even a “pause” button for when you need to turn off the $5/week charge while you recover from a hardship, like a job loss.

Instead of making it more difficult to pay back the debt, the idea is to be lenient – taking as little as a $1 per week, if need be, while maintaining the customer relationship during the bad times.

“It’s kind of like insurance,” says co-founder Jon Schlossberg. “You pay a flat monthly fee for coverage.”

It’s still expensive to be poor: Even would cost $260/year, but it’s less expensive than getting into trouble with payday lenders. It could also mean that bills and rent get paid on time, which could potentially break the cycle where a single bad break, or a week with reduced hours, can snowball into homelessness.

Citing a U.S. government research study, Schlossberg says he was blown away by learning that 77% of Americans reported they would rather have more consistent income than make more money. A self-admitted “privileged white male,” he realizes that having everything come easy is not the case for most, he says.

“Just wanting money to be there every week is one hardship I’ve never experienced…that’s something that’s kind of hidden from Silicon Valley”

“Just wanting money to be there every week is one hardship I’ve never experienced…that’s something that’s kind of hidden from Silicon Valley,” says Schlossberg. “The problem is income volatility.” What’s increasingly happening, he explains, is that as the workforce shifts towards more flexible labor, part-time workers end up with inconsistent hours. This issue was recently detailed in a New York Times profile of Starbucks barista Jannette Navarro, whose ever-fluctuating hours at the popular coffee chain were due to Starbucks’ reliance on employee scheduling software, designed to boost profits, not make workers’ lives easier.

In addition to its $5 per week consumer-facing service, Even is also selling to enterprise, and has at least one deal in discussions with a large business that you “visit weekly.” (Starbucks?,” I guessed. “No comment.”) With corporate customers, Even could be offered a company benefit – potentially even boosting the bottom line due to the high costs associated with part-time turnover, associated with the shift scheduling issues. (U.S. businesses see 69% turnover for part-timers vs. 23% for full-time workers, excluding seasonal labor, Even reports.).

The company is based in Oakland in order to strategically place itself closer to potential customers. In addition to product designer Schlossberg, previously of Bonobos, its founding team includes designer and engineer, Ryan Gomba previously of Instagram, who worked on the iOS app; Cem Kent, previously of Taykey; and Quinten Farmer, who earlier tried to tackle the student loan problem via The Open Loans Project.

Schlossberg acknowledges that they don’t know if the business model of charging $5/week will work, because there are a still a lot of unknowns the pilot is attempting to figure out like the average credit utilization or how much they’ll lose on defaulted credit. But he does say that the big businesses they’ve talked to so far are “extremely receptive to this product.”

“If we’re right, it’s a win for their company, it’s a win for the employees because their lives are meaningfully improved, and it’s a win for us because it gives us distribution into a market that’s vastly underserved,” says Schlossberg.

Even expects to launch publicly this year, though users can request an invite now.


Square Offers Small Biz Cash Advances

Mobile payments processor Square today announced Square Capital, a merchant cash advance service for small businesses.

News of Square Capital’s pilot program leaked earlier this year. While Square spokesperson Faryl Ury declined to share exact figures, she says the company has already extended “tens of millions of dollars” to thousands of Square customers.

Square Capital offers merchant cash advances, rather than traditional loans, according to the company. Ury says pilot program participants have used the cash advances to buy inventory and equipment, expand to a new location and hire new employees. One customer, Caroline Bell, says she used a cash advance to open a sixth location of her New York City coffee chain Café Grumpy. ;

Currently, Square Capital is only available to certain Square merchants. Square analyzes its customers’ financial history on the platform to assess which businesses are eligible for Square Capital. This history is also used to determine Square’s cash advance offer.

Unlike with a traditional loan, Ury says Square won’t charge interest on the amount of cash extended. Instead, Square proposes a set fee upfront. (In an example provided by the company, the fee was $1,000 for a $10,000 cash advance.) Then, Square deducts a set percentage of daily sales made through the Square platform until the cash advance and fee are paid back.

“There’s no set payback period, but we do create an offer that a business can typically pay back within 10 months,” says Ury. The upfront fee and the percentage of sales deducted are variable and are based on Square’s understanding of its customers’ financial profile.

Ury says the average advance during the pilot phase was “several thousand dollars,” but that the average could soon rise, as larger businesses start using the service. She adds that Square is looking to quickly extend hundreds of millions of dollars, as more merchants are notified of their eligibility for a Square Capital cash advance.

An Increasingly Crowded Field?

Since the financial crisis, the small business credit crunch has attracted a growing number of companies. Last September, PayPal started offering small business customers cash advances equal to up to 8% of their annual PayPal sales, with between 10% and 30% of daily sales deducted until the loan and set fee are paid back.

While the PayPal Working Capital program is just one of the many services PayPal offers business owners and consumers, a handful of startups have cropped up that are solely focusing on small business credit issues. Most lean heavily on data from online banking accounts, payment processors such as Square, accounting platforms and even social media networks to quickly approve traditional loans or cash advances.

“We have a unique twist. We provide a highly automated, low-pain opportunity for small businesses to obtain capital, and that remains our distinction in the marketplace,” says Kabbage CEO Rob Frohwein.

Since 2011, Frowhein says Kabbage has deployed over $300 million in working capital to over 250,000 small businesses. The Atlanta-based startup has raised $106 million in equity and $350 million in debt, with the latter used to provide capital to its customers. Loans range from $500 to $100,000.

Other big players include CAN Capital and OnDeck Capital. This year, CAN Capital announced $33 million in funding co-led by Meritech Capital Partners and Accel Partners, bringing total funding to over $66 million, while OnDeck CEO Noah Breslow says his company has raised $180 million in equity. The data-driven approach to small business lending allows all three companies to advertise shorter approval timelines, ranging from one to three days.

“The average business owner spends 26 hours preparing a traditional loan application. OnDeck cuts it down to minutes,” says Breslow, who says OnDeck uses roughly 2,000 data points in its decision-making process.

Breslow says he’s not too concerned about Square’s entrance into the marketplace given OnDeck’s core demographic. He says OnDeck targets Main St. brick-and-mortar merchants with average annual revenue of $1 million. He says OnDeck has deployed over $1 billion to small businesses since its launch in 2007.

And younger startups such as Fundbox, which came out of stealth mode earlier this spring and announced $17.5 million in funding led by Khosla Ventures, are focusing on even smaller segments within the small business market. Fundbox, for example, is targeting the B2C business by clearing invoices for companies waiting to get paid by business clients.

Though the field may seem increasingly crowded, Kabbage investor and BlueRun Ventures general partner Jonathan Ebinger says the market can sustain a number of companies looking to alleviate the small business credit crunch. BlueRun Ventures, which led Kabbage’s Series A round, has invested $10 million in the startup according to Ebinger.

“It’s still as pressing as ever institutional banks and global money center banks have not moved back in to lending to small businesses. A typical response from a bank to a small business asking for a loan would be to get a credit card,” says Ebinger. He adds that many local banks and institutional banks are ill-equipped to analyze online-only businesses.

Ebinger says there may be a number of success stories within the small business financing field.

“The overall point is this is a huge underserved market with a few potential winners. Financial services is a huge field,” says Ebinger. “Wells Fargo and Bank of America can both be successful — this is not a winner-take-all situation at all.”

Follow Gabrielle Karol on Twitter @GabrielleKarol


PayNearMe(R) Triples Its Payment Volume in 2013

SUNNYVALE, CA–(Marketwired – Feb 6, 2014) – PayNearMe, the electronic cash transaction network, today announced that it has closed a $20 million round of financing led by GSV Capital. August Capital, Khosla Ventures, Maveron and True Ventures also participated in the round. PayNearMe will use the funds to continue expansion into existing categories while launching into new vertical markets.

PayNearMe is the simplest, quickest, and most convenient way for consumers to pay bills and rent, repay loans, buy tickets and make online purchases with cash. PayNearMe caters to the 60M to 100M Americans who need or prefer to pay with cash. To make a PayNearMe payment, consumers simply bring their payment code to one of over 17,000 participating retail locations, including 7-Eleven® stores nationwide, and pay with cash at the register. In contrast to outdated, alternative payment methods, consumers don’t have to fill-out any forms or wait in long customer-service lines. They can make cash payments 24/7 in less than 60 seconds and have their payments posted immediately to their biller’s account. Additionally, PayNearMe offers the only mobile cash-payment option for consumers.

“At PayNearMe, we have made it a priority to level the playing field by making it easy for every consumer to participate in the digital economy, even if they prefer to pay for goods and services with cash,” said Danny Shader, CEO of PayNearMe. “Our powerful transaction platform adapts to suit the specific needs of a variety of businesses and organizations that want to accept cash payments remotely.”

PayNearMe Expands its Presence

Over the past year, PayNearMe has tripled its payment volume by growing in the following categories:

Rent – Property management companies that use software like AppFolio and RentPaidOnline can now use PayNearMe to make it remarkably simple for property managers to accept rent deposits and monthly rent payments from their cash-preferring tenants. With PayNearMe, property managers never have to manually count, process or reconcile cash or money orders. This efficient solution also eliminates the security risks associated with operating a dropbox, holding cash on-site or carrying it to the bank. Utility agencies – Nine California agencies including Glendale Water and Power, Padre Dam Municipal Water District, City of Tracy, Park Water Company, City of Fairfield, City of Santa Rosa, City of Oxnard, Mission Springs Water District and Helix Water District offer their customers the convenient option of making water bill payments in cash. These customers can now pay their bills 24/7 in a matter of seconds instead of taking the time to travel to the water district’s office on a weekday to make their payments in person. Auto-lending – Hundreds of financial institutions that use loan-servicing software from Shaw Systems, Megasys and Nortridge Software Company can now accept cash payments from millions of borrowers. The integration of PayNearMe into loan servicing software enables cash payments to be processed in the same automated manner as other electronic payments methods.

In addition to strengthening its presence in these markets, PayNearMe is gaining significant traction in new categories such as self-storage, direct selling, auto insurance and banking. PayNearMe is also negotiating with leading companies in healthcare, airlines, tolling, child support and online entertainment.

“PayNearMe’s success can be attributed to its unique ability to respond to the latest trends and adapt its solution, giving businesses the options they need to efficiently service a broad economic range of consumers — not just those who can swipe a credit or debit card,” said Michael Moe, Chairman and CEO of GSV Capital. “This additional funding will help accelerate PayNearMe’s growth and open the door to even more consumers who need the invaluable option of cash payment.”

To learn more about PNM please visit

About PayNearMe

PayNearMe is the electronic cash-transaction network that enables consumers to pay rent and utility bills, repay loans, buy tickets, make online purchases and do much more with cash. Consumers can conveniently make payments on their own schedule and in their own neighborhood in less than a minute at one of over 17,000 trusted locations including 7-Eleven®, Family Dollar® and ACE Cash Express® stores across the United States. For more information, please visit:

Finance Contact:

Media contact for PayNearMe:

Amber Moore
GMK Communications for PayNearMe


Pawnshop exec took gold bars from vault

By Elena Chong, Court Correspondent
The Straits Times
Sunday, Jan 06, 2013

SINGAPORE – A pawnshop employee who helped himself to about $465,000 worth of gold bars, jewellery and cash was sentenced to five years’ jail on Thursday.

Customer service executive Desmond Kee Chia How, 27, owed money to a loan shark and was looking for a way to pay.

During a shift at Maxi-Cash Ventures in Yishun on July 2 last year, he went into the vault and took five gold bars worth a total of $314,700 from a safe.

Two days later, he helped himself to $41,186 of jewellery and watches. The father of two also misappropriated $108,737 that a customer had paid him in order to redeem her pawned jewellery.

He sold the bars to two gold dealers for $308,000, the court heard. He gave this money to the loan shark – known only as Ah Di – at a carpark opposite VivoCity.

The following day, he also handed over the jewellery, watches and cash.

He pleaded guilty to one count of criminal breach of trust as a servant and two money laundering charges relating to the cash and goods that he gave the loan shark.

No restitution has been made.


U of T student tries to pay off a $114,000 student loan in cash

Last week, a Reddit user posted a photo of a $114,000 student loan bill—paid in cash—that elicited thousands of comments and dozens more when we posted it here.

Since then, the anonymous alum has stepped forward as Alex Kenjeev, a 2009 law school graduate of the University of Toronto.

Kenjeev, who works for venture capitalist firm O’Leary Ventures, told Business Insider the $114,000 payment was the last chunk left of $190,000 in loans he took out during school.

He’d spent years dragging out his payments while pouring most of his income into a start-up. As for why he paid in cash, Kenjeev said he wasn’t proving some point about the dangers of credit cards or trying to show off. He just thought it’d be really funny.

“It was stressful enough to carry such a big debt load. I thought it would be worth getting a few laughs out of it,” he said. “Neither bank thought it was as funny as I thought it was.”

In fact, when Kenjeev showed up at the Royal Bank of Canada to withdraw the cash, the management initially refused him. Then they told him he’d have to pay a transport fee to have it delivered by armored truck.

We reached out to an RBC spokesperson, who said that while the bank does take precautions for large cash withdrawals, it wouldn’t order an armored courier unless a customer asked for specific denominations or had a strict timeline for receiving the funds.

In the end, Kenjeev dodged the fee but had to wait three days before he could pick up the cash.

“After so many years of carrying student debt, a few extra days didn’t bother me,” he said.

With the money stuffed into a canvas bag, he walked the two blocks over to Scotiabank, where his student loan was held.

“I just plopped the bag down (on the counter),” he said. “They also didn’t know how to handle it. At first the manager didn’t want to accept the money.”

While Kenjeev waited, calls to higher-ups were made, his RBC withdrawal slip was reviewed, and tellers went to work counting the bills by hand.

“I was pretty naive,” Kenjeev admitted. “I didn’t really realize how much of a hassle I’d cause for everybody. You just look at things and you figure cash is simpler than anything else.”

When all was said and done, he shook hands with the bank manager and walked out two-and-a-half hours later—completely debt-free. The idea to post a photo on Facebook came spontaneously, but he still doesn’t know who posted it on Reddit.

“I was feeling very good about finally being debt-free,” Kenjeev said. “Some people have taken it pretty offensively. I actually think they have a point. It hadn’t really occurred to me.”