According to an SEC filing and confirmed today by CEO Marla Blow, fintech startup FS Card has raised $8 million from Tricadia Capital. The financing brings the company’s total funding to date to $30 million.
Founded in 2014, FS Card, Inc., delivers financial products to millions of Americans with subprime credit scores –those who don’t typically have access to credit cards or other financing options.
The company recently launched the credit card Build that provides customers with an alternative to local payday lenders’ sky-high rates and, in the process, improve their FICO scores and build future capacity for credit.
The company’s credit products target subprime customers with credit scores of between 550 and 600, a group that’s largely been overlooked by the big banks. The Build card, which has been on the market for just 18 months, has issued $25 million in credit to nearly 50,000 customers.
The company does not aim to compete with mainstream financial institutions. Its goal, according to CEO Marla Blow, is “to serve the underserved Americans who are otherwise strapped of credit solutions.”
Blow, a financial services veteran and credit expert who previously held senior executive roles at Capital One, argues that the company is addressing an issue that is increasingly becoming a “middle class problem” — citing the growing number of people who are living paycheck to paycheck and can’t afford a $400 cash advance in emergency situations. Said Blow: “We don’t want them to be left without any choices.”
FS Card currently has 25 employees and Blow plans to expand the company’s team by 50 percent by mid-2018. The company’s current growth rate is an impressive 10 percent per month.
FS Card addresses the risks inherent in lending money to subprime borrowers by using advanced behavior modeling analytics and machine learning to target customers. The company seeks to service those who have hit a rough patch, versus those who have chronic financial problems. According to Blow, the company examines individuals’ credit profiles, looking for indicators that suggest an upward trend in their credit behavior.
The Build card costs $75 annually, and it offers a starting credit limit of $500. Interests rates are in the high 20’s range. To learn more, go to: https://thebuildcard.com/.