Jessica Zhang and Alex Hegevall Clarke saw how costly and time-consuming it was for the credit industry to gear its tech stacks to comply with strict federal and state requirements while employed at the fintech lending platform Stilt. They, therefore, decided to construct something simpler.
“The fragmented nature of existing solutions and the high compliance hurdles make it difficult for businesses, whether brick-and-mortar lenders or venture-backed startups, to launch products quickly and compliantly,” Zhang told TechCrunch. “Pier is developing ‘Stripe for credit,’ an automated credit product platform for businesses.”
This is how it operates: According to Zhang, developers can save months of work and millions of dollars by adding Pier’s APIs with just a few lines of code. The entire credit lifecycle, including origination, underwriting, compliance, and servicing, is then managed by Pier’s system.
Other businesses have called themselves “Stripe for credit,” such as Setpoint, a startup that created tools to expedite loan transactions. About six months ago, Stripe developed new credit solutions for companies.
In contrast to payments and banking, Zhang explained that Pier, which debuted in 2023, is more of an ongoing, dynamic process that changes during each loan’s existence. While other systems focus on particular life cycle aspects, such as Know Your Customer or underwriting, Pier offers a more all-encompassing approach.
Pier is a Software as a Service provider that levies a monthly fee comprising a usage fee that depends on the volume of loans, use cases, and inquiries, in addition to a monthly minimum. Credit builders, purchase now, pay later loans for weddings and sustainable energy, salary advance loans, merchant advance, and portfolio lines of credit are a few of those use cases.
Zhang stated that the company has more than a few years of runway experience but remained silent about the number of users and revenue growth.
The business just obtained $2.4 million in seed money. Y Combinator, Liquid 2 Ventures, ACME, Horizon Ventures, and several angel investors, including Morgan Stanley’s Brian Neer, Seth Weinstein (the former CEO of Morgan Stanley Fund Services), and YC partner Divya Bhat, are among the investors in the round.
Zhang intends to use the additional funds to hire staff members and develop new products.
In summary, the infusion of $2.4 million in funding marks a significant milestone for Pier as it endeavors to introduce a credit-focused platform often compared to the ‘Stripe for credit.’ This financial support is expected to be crucial in expediting the development and launch of Pier’s innovative solution. Drawing parallels to Stripe, a prominent figure in online payment processing, implies Pier’s objective to simplify and optimize credit-related processes, potentially transforming how businesses and individuals handle their credit transactions. With the backing of these funds, Pier is well-positioned to navigate the challenges associated with introducing a groundbreaking financial service, highlighting the trust investors place in its vision. The success of Pier’s venture holds the potential to reshape the landscape of credit services, presenting a compelling solution within the dynamic fintech industry.
(Information Source: Techcrunch.com)
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