It’s easy to sign up for subscriptions, but it’s hard to remember to cancel them.
Truebill, a startup that helps its customers manage their finances, has raised a $5 million Series A. Investors in the round include Cota Capital, Social Capital, and Day One Ventures. The round brings the Y Combinator-backed company’s total known funding to about $7 million.
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The company also has a host of high-profile individual investors, including the former president of PayPal David Marcus, co-founders of Warby Parker Neil Blumenthal and Dave Gilboa, the Co-founder of Youtube Jawed Karim, and others. In addition to the funding, the company has instated a new CEO, co-founder Haroon Mokhtarzada.
Mokhtarzada started Truebill with his brothers, Yahya and Idris, after they sold their previous company Webs, a website creation service. The team originally focused on providing individuals with a platform through which they could easily link their bank accounts to track their recurring subscriptions.
“When you run a subscription business, you realize that there are people who renew because they just don’t get around to canceling,” Mokhtarzada said. “There’s a decent amount of people are doing just that.” He said that after the brothers launched the project on Product Hunt to gauge interest, they decided to launch the company.
Since its launch, Truebill has moved into other financial service verticals as well. The company’s platform now includes a premium subscription service, which includes a targeted savings system that lets customers set the frequency and amount they save.
Truebill also offers a bill negotiation service, through which the company negotiates on behalf of the customer to lower the cost of recurring bills like Internet, phone, and cable packages. The company, which charges 40 percent on the first year of savings accrued through bill negotiation, used to partner with Bill Shark. However, it moved away from that partnership.
“Basically for the first 10 months, you’re in the hole with Bill Shark,” Mokhtarzada explained.
The company currently has 150,000 active users—determined as those with linked bank accounts—on its platform. And while the CEO declined to state how many of those users are premium subscribers, he said that the company has a “healthy conversion rate.” Mokhtarzada also told Crunchbase News that its revenue sources include about 40 percent from fees for bill negotiation, 40 percent from premium users, and 20 percent from partnerships.
With the funding, the team of 14 plans to add more talent and double down on making Truebill a one-stop-shop for financial transactions.
“If you can see all your bills in one place and you can manage them all in one place [then] you should actually be able to pay them all in one place as well,” Mokhtarzada expressed.
Crunchbase News asked the CEO if he envisions the company entering the online banking space eventually, potentially competing with companies like Chime or Varo, while also maintaining its other platforms.
“That’s a very good prediction of where we may end up.”