(Splitwise Co-founders Ryan Laughlin, Jon Bittner and Marshall Weir)
Money makes any conversation uncomfortable. No one wants to talk about who owes whom what and when. But with Splitwise, the only time finances need to be discussed is when the startup has closed a $1.4 million seed round.
Splitwise announced Tuesday it's raised funding from Silicon Valley Bank, Great Oaks Venture Capital, IDG Ventures USA, Rocketship.vc and PayPal board members Cyan and Scott Banister, among others. The round brings the Providence company's total amount raised to $2 million.
What started as a side project for Jon Bittner has turned into an app that's helped users split more than $1 billion in expenses over the last year. "It's awkward to talk about money with your roommates," Bittner said. Yet it's that unease that inspired the birth of Splitwise in 2011.
Bittner was an astrophysics PhD candidate studying at Harvard when he created a calculator that split rent based on square footage — a tool accurate within 10 percent. He had just spent two years writing a paper and "decided to work on this side project to cheer [himself] up." Word-of-mouth spread, and 100,000 people visited his website in one month.
"I spent two years working on this paper no one read," Bittner said, "and then I spent one week screwing around on the Internet and this."
That's all it took for Bittner to decide it was time to drop out of graduate school. He brought Yale computer science student Ryan Laughlin on board and formally launched in April 2011. That same year, Splitwise became a MassChallenge finalist and gained entry into Providence accelerator Betaspring. The startup then added a third co-founder, Marshall Weir, to keep the momentum growing, and Zoe Chaves as a growth hacker.
Over time, the platform has evolved from one helping roommates split their rent to becoming "more like a social network," despite Bittner's hesitancy to use that description.
"Now, you can split money with anyone," the chief executive explained. "We see people using it with their co-workers, their loved ones. Here's a transparent system that takes so many awkward conversations out of any relationship."
Splitwise, available for free on the Web, iPhone and Android, keeps a running tally of who owes whom what over time, so people can pay each other back in lump sums, rather than a series of smaller payments. Users can also get notified when their rent check is due, or receive a reminder when they have forgotten to reimburse someone for lunch or that recent ski trip to Vermont.
What's more, Splitwise is integrated with PayPal and Venmo and plans to add other mobile payment features to the app based on its users' needs. "Venmo is a friend," Bittner noted. "We want to work with all the best players [in the payments space]."
But to Bittner, while payments are an "important piece," they "are not the primary thing that's stressful about money." For those who see each other on a regular basis, having a constant conversation about money can be unbearable. As pointed out by Bittner, not many couples want to talk about costs every time they go out for coffee or dinner.
With the funding, the team will set its sights on hiring engineers to help improve the product and create a sleeker experience for users. "We have a lot of work to do as we grow from our most loyal adopters to more mainstream users," Bittner acknowledged.
The easiest way to do that? "Simplify."
"Our primary focus is how to make adding bills easier than it is now," Bittner said. "We're making it less work to connect with your friends."
Images via Splitwise
