The First Coast is chock full of companies and nonprofits developing new products, growing their teams and supporting their communities.
To provide a window into that growth, we’ve singled out six outstanding innovators to honor with the 2023 Fire Awards, presented by First Coast Inno and the Jacksonville Business Journal. The honorees include startups and more established firms, and vary in industry and geography across the First Coast. Read more about each of the Inno on Fire Class of 2023 Honorees below:
Company Name: Paywallet
Industry: Fintech
Co-founders: DK Sharma
Year Founded: 2021
Brief description of what the company does: Paywallet is a software-as-a-service platform that enables payroll-based financial transactions. Its technology allows lenders to evaluate borrowers based on their income, not just credit score, which can result in lower interest rates for credit-challenged consumers.
2022 Funding: $8.82 million (Series A)
As you reflect on your company’s successes and growth, what was the prime contributing factor? Before we set up the technology, we tried an experiment. There’s a segment of people who are responsible, who have stable jobs and the ability for repayment, but they don’t have a great credit profile. So we lent out $12 million of our own money to people in stable jobs — making sure that this idea of getting data from payroll and collecting from payroll had legs. We showed through the data that when we do affordability-based underwriting, we can improve loss rates. We are basically identifying segments of people who can be upgraded to a near-prime or prime rate.
Why is there a need for your technology? There are many people who are living paycheck to paycheck who are able to finance their obligations. In the aftermath of the 2008 financial crises, there was a massive divide between those who could get credit based on good credit scores and those who need credit but had blemishes and couldn’t get it without double digit rates. People with blemishes on their credit have trouble getting affordable credit. We are enabling extension of credit with much better rates. Our technology also benefits those with higher credit scores. We allow a better offer for those who are willing to use their payroll as collateral. We believe we are supporting sustainable buy-now, pay-later: It’s sustainable, and it’s good for everybody.
Now that VC funding and investments have begun to slow, what is your strategy for seeking outside capital? We will probably do more rounds of funding, in order to invest more in business development and our partnerships. We want to show prudence in how we’re going to the next step. We don’t believe in that model of taking money and spending money. I think there’s always money for responsible companies.
Taking a step back to the company’s founding, are you where you expected to be by now? We are not exactly where we hoped we would be. While we have a pretty good pedigree, buying cycles take a long time. We’ve had some headwinds because of the economic cycle, but there’s no strategic challenges. Potential lenders and potential clients have pressing concerns, and we can be part of the solution.
Where does the company go from here? What is next for your company in the short to near-term? We have signed with several clients, and are in conversation to bring that number to about a dozen. We would seek to have something in the range of 30 clients. We can see this becoming a default for people who are credit challenged. We should be cash-flow positive this year, proving that this is a sustainable business.
