ImpactAlpha, August 18 – Fintech startup Fig launched in 2015 to help nonprofit organizations combat predatory payday loans for low-income Americans, and has scaled its impact by helping nonprofits expand their own financial services. A $23 million round of debt and equity funding, led by alternative credit provider Upper90, positions the B Corp. and community development financial institution to expand services to more nonprofit partners.
“It’s a stepping stone to working with community banks,” Fig’s Jeff Zhou told ImpactAlpha.
Techstars Ventures and PurposeBuilt Ventures also backed the round.
Houston-based Fig wants to disrupt structural issues in the financial services sector that disproportionately impact low-income households.
“Payday lenders and many more traditional financial institutions’ bottom lines are dependent on day-to-day nickel-and-diming, which makes everything much more expensive for low-income households,” said Zhou.
The company’s original product provides $300 to $750 in flexible emergency credit (see, “Fig Tech gets backing for lending platform aimed at community organizations”).
Its other key offering is credit underwriting, analytics and management software that enables nonprofits like partner United Way of Greater Houston to provide financial services alongside other basic services and relief.
Fig supports 40,000 organizations in six states. Zhou said Fig has seen increased interest from nonprofits in shifting to online products and services amid the pandemic.
“Nonprofits offer almost all of their services in-person,” he explained. “That’s less efficient than going digital, and it’s also a health risk right now.”