Editor's note: In our 2024 Startups to Watch feature, the Silicon Valley Business Journal and San Francisco Business Times present startups and founders building groundbreaking products and companies in the Bay Area. PromisePay is one of 17 we profiled this year — to read more about our mission and the other startups we're featuring, click here.
Some startups are loud about what they’re doing, but not PromisePay, a company developing fintech software a bit more quietly for governments and lower-income residents. It’s one of those if-you-know-you-know things.
“Our investors tease us because they’re like, 'I feel like the only ones that know about you are other investors,'” CEO Phaedra Ellis-Lamkins said, because VCs are always looking at market trends. “We’re definitely a heads-down company.”
Far from being secretive about it, though, PromisePay says it has tens of millions of users across the U.S.
“The people who know the most about us are people who are eligible for our services in the jurisdictions that we work in, and that’s what we focus on — the government clients who we work for, and the people who are eligible for whatever we’re offering,” Chief Legal Officer Diana Frappier said.
About PromisePay
- Founded: 2017
- Founders: CEO Phaedra Ellis-Lamkins, chief legal officer Diana Frappier
- Headquarters: Fairfield
- Employees: 55
- Total funding: ~$50 million
Ellis-Lamkins and Frappier co-founded PromisePay in 2017 after building their respective careers in the labor movement and legal sector.
They originally developed Promise as an app that would help keep people out of jail for nonviolent offenses by providing reminders about important dates and schedules, but it was tough to run as a business.
“We were trying to figure out, how can we keep people out of custody who really shouldn’t be there,” Frappier said, especially for nonviolent offenses where someone just can’t afford bail or forgets a scheduled parole check-in.
They decided to shift focus to fintech, creating a verification and payments tool for government services.
Promise now offers three main services: income verification for certain government programs, distribution of relief aid, and interest-free payment plans for utility bills.
Their suite of services helps lower-income residents stay debt-free, prevents utility shutoffs for lack of payment, diverts people out of the justice system and keeps revenue flowing to utility companies.
Promise charges a subscription fee for its government clients, and then only takes a standard transaction fee from any payments that it processes from residents. The company says it's already profitable.
“There’s something really critical about people who have experience, not just young people, starting companies,” Ellis-Lamkins said. “We made sound decisions, and then we grew because the product worked.”
Their biggest challenge? Combating historical norms.
“It’s a new thing to think of poor people and people who have been struggling to build beautiful products and use data to make decisions,” Ellis-Lamkins said. “Sometimes there’s a false choice, which is people either say ‘We’re doing this because it’s the right thing to do,’ or people say ‘We’re making a decision because it’s the smart money decision’ ... It’s not that Peloton is like, 'We want to treat people who can afford a Peloton with so much grace and dignity.' It’s more, people buy the product if we give flexibility. And so the challenge, I think, is to help people understand it’s a smart business decision. It is not just the right thing to do.”
