A VC firm raising money from retail investors has added its first portfolio startup – an app that takes on a ubiquitous financial headache.
Zell Capital has invested an undisclosed amount in a seed round for Dolr, which finds outside sources of cash to help pay down student loans. Both are based in Columbus.
"The problem they’re solving is a significant problem in society, and they’re taking a unique approach," said Will Zell, founder and CEO of the firm seeking to raise $50 million in chunks as low as $1,000.
Naveed Iqbal founded Dolr with three friends from Florida Institute of Technology, where he earned his undergraduate through doctoral degrees in mathematics.
They knew they wanted to build a company together and that it should help people, Iqbal said in an interview. One night as he watched his wife "in battle with her laptop," he found out she was paying student loans. That's when lightning struck. More than 43 million Americans are struggling to pay down $1.7 trillion in debt.
"We want anybody who’s going to college to get Dolr," Iqbal said. "It’s a societal burden, so society should help.
"We want to be the student loan servicer who does not own any loans," he said. "We do intend to grow quite aggressively over the next couple of years."
In stealth mode, the app built up some 150 users and $8 million in debt under management. Dolr incentivizes users to pay down debt through everyday actions, generating an average $165 monthly in outside cash per user, from sources such as a tax-deductible employer student loan benefit and rewards from retailers.
"You’re helping them live their best lives: They’re shopping, they’re spending money and they’re paying down student loans," he said.
So far, all of the contracts have been generated from cold calls – but employers especially generally agree after about 10 minutes, Iqbal said.
If someone started using the app upon graduating and used the extra cash to pay down principal in addition to regular minimum payments, Iqbal said, the typical 10-year repayment would shrink to six, saving about $15,000 in interest in fees on a $39,000 debt.
Coincidentally, another startup Columbus VC firm, Overlooked Ventures, has invested in a Dallas-based competitor with a similar model: College Cash. "Nice to see more folks tackling this issue," Iqbal said.
As CEO, Iqbal is the only founder with a title. His partners lead functional areas:
- Alex Michaels, business development.
- E.K. Dzotsi, marketing.
- Ashwin Acharya, technology.
Dolr is a registered trade name for the business, incorporated as Noether Rudin Inc. in 2019, just before the pandemic.
"We had the opportunity to slow things down and really dig in: How can we provide maximum value given very limited resources?" Iqbal said. "It also made people, I believe, a little more willing to speak with this fledging startup out of nowhere."
Iqbal, who immigrated from Tanzania, first moved to Columbus to work in banking, in separate stints in risk management and product development. A neighbor introduced him to Central Ohio's startup community, and he worked in data analytics for a startup.
This year, he prepared a 12-slide presentation to persuade his three partners to leave Florida for Ohio.
"The first slide, I said, ‘You have to move to Columbus,’ and they said, ‘Great, let’s move on,’ ” Iqbal said. “I had 11 slides left.”
Dolr's accountant made the introduction to Zell, and their first conversations led to features that are in the app today. Iqbal said he was willing to wait as the serial entrepreneur worked through regulatory complexities of rolling out a VC fund using a novel interpretation of 1940 securities law.
"This is like marrying somebody," Iqbal said. "When you come across an investor like Will, you makes sure that relationship sticks.
"Will does business exactly the way we do business. We’re very transparent, very upfront; we just want to help."
