Financing possible was growing and ready to raise more venture capital. Then COVID-19 hit.
“This immediately made fundraising much more difficult than expected,” said Tony huang, CEO and co-founder of the 3-year startup that runs a high-tech small loan department.
But the company ended up connecting – via Zoom calls, no less – with New York-based Union Square Ventures, which ultimately led an $ 11 million round for Possible. It was the first deal the well-known company had reached via videoconference.
Possible announced the new funding on Tuesday, along with $ 80 million in debt financing from Park Cities Advisors to help boost its business.
Founded in 2017, Possible offers loans up to $ 500 and is similar to payday lenders, but with a few differences. Borrowers have more time to repay the money in installments, and repayments are reported to credit agencies, helping people rebuild their credit. Traditional payday loans are structured differently, so these payments do not count towards credit scores, which can trap consumers in an expensive borrowing cycle.
Use possible funding application, people can apply for loans without a credit check and receive funds the same day. Possible Finance is linked to a customer’s bank account and uses machine learning to analyze financial transaction data to make credit risk decisions rather than relying on FICO credit scores.
Huang said the pandemic affected customers and the business in unpredictable ways. He implemented a hardship program for customers who needed more help and allowed people to delay payments without additional fees or defaults on their credit reports.
“Hardworking Americans need financial support more than ever, and we are committed to providing fair and affordable credit to as many people as possible,” said Huang.
Possible not only to have embraced remote fundraising, but also to work remotely. It had about 30 employees all based in Seattle before the pandemic. Today, it has more than 60 workers spread all over the world.
“We have completely shifted to distributed working, converted our office into a co-working space, and started recruiting talent from around the world,” Huang noted.
Huang and his co-founders – Prasad Mahendra and Tyler conant – previously worked together at Axon, the leading manufacturer of non-lethal tasers, police software and supplies, including on-board cameras and police cameras.
Existing investors Canvas Ventures, Unlock Venture Partners, Columbia Pacific Advisors, Union Bay Partners, Tom Williams and FJ Labs also participated in the round. Total equity funding to date is $ 25 million.
Possible had already secured a $ 30 million credit facility from Park Cities Advisors in April 2019.