With the aim of keeping consumers out of the hands of predatory lenders while helping companies capture at-risk dollars, Zirtue is launching a new side to its business.
The Dallas-based startup, which offers a peer-to-peer, relationship-based lending platform, has formed an alternative payment solution allowing customers to pay bills directly through the company’s app. And it’s quietly raised millions to get it off the ground.
“The B2B product is really about baking in bill pay transparency for people that are looking to get their financial lifeline or borrow money from a friend or family member to keep the lights on, get access to health care, and keep the car running,” said Dennis Cail, Zirtue CEO and co-founder.
The new payment solution expands on Zirtue’s initial focus of structuring and automating personal loans between friends and family. It allows users to request funds to pay off bills and loans, with Zirtue’s technology directly transmitting borrowed funds to the creditor, which Cail said helps businesses by letting them take on clients it would have otherwise considered at-risk, in addition to creating more inclusion and opportunities to build credit for consumers.
The company has been piloting the technology over the past year with clients like Texas Health Resources and Reliant Energy. Cail said Zirtue plans to focus on facilitating loans for things customers need, rather than wants like fashion retail.
“Leveraging a platform like Zirtue, to capture those at-risk dollars, for a small fee is really a no brainer for a lot of our enterprise partners,” Cail said. “It’s about getting access to things that they need, so that they can get that on-ramp to financial inclusion.”
Acting as a supplemental revenue stream, the launch of the new product comes after Zirtue dropped membership fees from its platform, something Cail said was a “huge friction point” for everyone from borrowers and lenders to creditors and investors.
“When people are borrowing money, the last thing they need is another fee,” Cail said. “So, once we (turned off subscriptions), we put all of our focus and attention on our B2B business model.”
To launch the B2B product, Zirtue has quietly raised $2 million over the past few months from venture capital firm Mercury Fund, bringing its total amount raised to about $6 million. The Houston-based firm joins other Zirtue backers, including Northwestern Mutual, Google for Startups Black Founders Fund, Revolution's Rise of the Rest Seed Fund, and the Jaylon Smith Minority Entrepreneurship Institute Capital Fund.
Cail said Zirtue has been aided by the tailwinds of recent talks surrounding diversity, equity and inclusion initiatives, which to him goes beyond racial equity into financial equity. While not disclosing specific figures, Cail said the company expects to see 120% year-over-year revenue growth this year. And he expects to see 300% YoY growth next year. Since launching in 2018, more than $40 million in loans have been processed on the company’s platform, after gaining nearly 20,000 users last year. It has also grown to a team of more than 12 DFW-based employees with an additional 10 offshore contractors.
“We continue to land and expand with our enterprise partners, as well as our go-to-market strategy, which is really centered around those partners and helping people to get access to the things that they really need,” Cail said. “We're focused on three things: our purpose, partnerships and profit, in that order. And, if we take care of the first two, we feel like the third one takes care of itself.”
