Kikoff, a fintech company that helps users build credit, launched publicly on Wednesday and announced $42.5 million in total funding.
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The company most recently closed a $30 million Series B round led by Portage Ventures Lightspeed Venture Partners led the Series A, and Steph Curry of the Golden State Warriors, Wex CEO Melissa Smith, and former U.S. Department of the Treasury CFO Teresa Ressel are also among the investors in the company.
The company, which targets Millennial and Gen Z users, is looking to help people who have low credit scores or no credit scores establish and build credit through its online store, according to CEO Cynthia Chen.
Chen spent 17 years working in consumer finance, where she saw “how a low or no credit score could keep people, and make them prone to predatory lending and make them fall into that spiral that they couldn’t get out of.”
Kikoff’s flagship product is a $500 credit to buy educational content from Kikoff’s online store. The educational content includes programming on financial health, personal improvement, and a variety of e-books. Users can’t pay upfront, but instead use the $500 credit and pay the balance of the credit line over time, like a revolving credit line.
Kikoff doesn’t charge interest or fees, and it reports payment activity to the credit bureaus, which helps users build credit. The company launched a beta version of the product in late December 2020 and launched its apps in April 2021.
With the new funding, Kikoff plans to increase its team of less than 24 people to more than 50 people by the end of the year. The company is planning on hiring for engineering, product, and operations roles.
Credit is the first step for Kikoff, but the company wants to expand to other parts of a consumer’s financial journey, Chen said. The next step is helping users manage cash flow before Kikoff moves on to help users with bigger financial goals like refinancing a student loan or getting a mortgage.
“A credit score is kind of like a GPA,” Chen said. “If you’re a college student of course a GPA helps. But a GPA is only helpful if you’re going to apply to grad school or apply for a job.”
Lightspeed Venture Partners partner Ansaf Kareem wanted to invest in the company in part because he’d personally experienced issues stemming from not having a credit score. It took Kareem two years after he graduated from college to get a credit card. He knew how that affected his ability to access other financial products.
“I do feel that credit is that gatekeeper,” Kareem said. “If you fall into a situation where you don’t have credit..your ability to get access to the U.S. financial system is basically hindered.”
Illustration: Dom Guzman
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