A startup that enlists employers and others to help pay student loans has enrolled about 7,500 users – up from 1,000 at the beginning of the year – and landed a promotional agreement that could bring many thousands more.
Dolr is able to add that many new users with just two employees so far, thanks to highly automated back-end technology.
"We didn’t have an option – we had to build it that way," co-founder and CEO Naveed Iqbal said in an interview. "Our onboarding takes 30 minutes; it doesn’t matter your size."
Borrowers can sign up directly for Dolr for free, and the app helps pay down debt using reward programs from retailers and other places they usually spend money. Users also can enlist friends and family to dedicate their loyalty rewards to the student loan.
But a major source of growth, and revenue, is employers offering debt repayment as an employee benefit. Chambers of Commerce also have promoted Dolr to small businesses. The Columbus startup has added 10 employers so far this year for a total of 44.
Revenue tripled in 2023 over 2022. This year, the goal is to grow revenue again by 20 times, and Iqbal said it's on pace – and should hit break-even by fall. Figures are not disclosed.
Dolr is one of the Columbus Inno's Startups to Watch for 2024.
Student loan bills came due again in October after years of pandemic deferrals. Meanwhile another pandemic provision creates a federal tax deduction for employers of up to $5,250 for student loan payments as a benefit.
Dolr has focused on non-hospital healthcare industries suffering from high turnover, such as senior living, nursing homes and behavioral therapy and developmental disability providers. The software integrates with the employer's payroll software.
"They desperately need a solution," Iqbal said. "They also happen to hire a lot of people who have student loans."
A single senior living operator brought on 1,500 employees. Campbell Street Senior Living operates communities in Iowa, Kansas and Minnesota.
“Providing the necessary care to our patients can only be achieved by hiring team members with both experience and education," Campbell President Greg Seeger said in a news release. "This program invests in our team members to allow for a path of longevity with the company."
The deal attracted the attention of a senior living and healthcare investment firm, Chicago-based Birchwood Healthcare Partners, which invested an undisclosed amount in Dolr, added a member to the startup's advisory board and entered a partnership to promote Dolr "throughout the senior care industry," according to a release.
“The partnership with Dolr represents our commitment to be the leader in senior care and help create a new standard for hiring and retaining the people caring for our seniors," Birchwood CEO Isaac Dole said in the release.
"Student loan debt can be a significant burden in the lives of our team members," Birchwood CFO Brenda Satterfield said in the release. "We want to lead the industry in new approaches to help enable and support workers."
Before, no single customer had more than 250 employees.
"We realized with Birchwood we could very happily serve much larger customers, well in advance of when we thought we could do that," Iqbal said.
Dolr has two full-time people, Iqbal and a sales rep. Iqbal is an engineer, and his co-founders have helped with engineering on weekends. With growth he's looking to hire engineers and customer support.
Hiring and training replacements can cost more than $25,000 per lost worker. On average, Dolr clients have cut turnover rates by 46%, Iqball said.
The average monthly debt benefit is $130. The highest is $437.50, the maximum for the federal tax deduction.
That tax break, however, is currently set to expire at the end of 2025.
"I do worry about that quite a bit," Iqbal said.
Through industry networking he's heard rumblings the deduction could be extended. But Dolr might not need it.
"The tax benefit is a nice bonus," Iqbal said. "The turnover is painful enough, it will survive."
The evidence for that theory is that existing clients keep increasing benefits or eligibility for employees to enroll without any upselling effort from the startup.
"They do it naturally – they see how valuable it is across the team," he said.
Dolr's revenue is a flat fee of $30 to $50 per enrolled employee, sliding with the size of the benefit.
Future features could include adding repayment through rewards programs from large recurring bills besides retail, or expanding into employer tuition reimbursement.
So far the startup has raised $675,000 in outside capital.
Dolr, the DBA of Noether Rudin Inc., started mid-pandemic, during the pause on student loans. A few local employers added the benefit to build culture, knowing forbearance would end someday. That resulted in a steadier rollout and allowed for refining the platform, Iqbal said.
The first customer from January 2021 is still using Dolr and keeps increasing monthly contributions to employee loans, he said. Customer retention remains 100%.
There are lots of competing apps for student debt repayment, including one with Central Ohio investors.
"Our flavor is we’re not trying to get you financial advice; our flavor is we’re just trying to get you more money," Iqbal said. "Our proposition to the end user is more cash.
"We have extremely big ambitions. We want to be the de facto way people pay for student loans."
