Nov 16, 2022, 07:00 ET
- The anti-fragile, credit-building startup immediately helps Americans facing financial challenges as they simultaneously confront a looming recession
- In the past month alone, StellarFi's ARR has grown by 105% and added 83% new members
- With U.S. inflation at 7.7%, short-term borrowing rates at their highest level since January 2008 and the average credit-card interest rate above 22% — StellarFi empowers members to dramatically increase their credit scores using their everyday bills and payments such as rent and utilities
AUSTIN, Texas, Nov. 16, 2022 /PRNewswire/ -- StellarFi, a financial technology company on a mission to disrupt the U.S. poverty cycle by opening access to credit, today announced it has exceeded $1 million in annual recurring revenue. The company emerged from stealth on June 28 and closed its oversubscribed $7 million initial funding round in March.
"The rate at which StellarFi is gaining traction is unheard of yet unsurprising as investors and consumers turn to innovative financial wellness solutions," said Alex Harris, General Partner Fiat Ventures. "Reaching $1 million in ARR less than five months after launch is reminiscent of the growth I saw at Chime and is a true testament to the resiliency of StellarFi's model."
StellarFi's performance amid recessionary macroeconomic conditions stands in contrast to the daily reports of tech-company layoffs and a decrease in the number of startup unicorns. Instead, StellarFi is positioned for continued growth as an anti-fragile fintech startup precisely because its value proposition succeeds during market downturns and upturns.
Roughly 61% of U.S. residents live paycheck to paycheck. More than 150 million Americans, half the country's population, currently have credit scores below 680. Twenty million of those have fallen into this category since the onset of the pandemic. StellarFi anticipates the economic downturn will drive another 30 million into this addressable market during the coming year.
"The path to surpassing $1 million in annual recurring revenue is typically a much longer journey for most startups," said Lamine Zarrad, StellarFi founder and CEO, who has launched three companies. "Even with economic headwinds, the convergence of StellarFi's top-notch team, its superb tech and the market opportunity has made this achievement possible."
StellarFi helps its members build credit by consolidating all bills and reporting payments directly to Experian®, Equifax® and Transunion®, adding to a foundation of a positive payment history.
StellarFi does not require a credit check, deposits, and charges no interest rates. The company's success lies in its absolute product-market fit, especially in today's macroeconomic climate.
"StellarFi is simultaneously making economic and social impact by reducing the barriers to capital, a tool that can keep Americans afloat during an economic downturn, "said John Gardner, Venture Partner at Acrew Capital and former Head of SoFi Invest. "StellarFi does something similar for credit building and personal finance to what SoFi did for investments by automating decision making and advice – essentially modernizing how credit works."
The impact of record inflation and rising interest rates on average Americans has been devastating. People are grappling with inflation of 8.2%, a 40-year high; short-term borrowing rates that are at their highest since January 2008; and average credit-card interest rates above 22%.
"StellarFi has a unique and appealing approach to improving their members' financial profiles while consolidating their bills," said Mike Vaughan, StellarFi investor and former Venmo COO. "Similar to Venmo, StellarFi understands consumer needs and the value of a simple user experience. StellarFi has the potential to become ubiquitous in the credit-building and bill payment spaces."
StellarFi's members enjoy an average of a 26-point increase in their credit scores during the first month. About 66% of members select the company's Prime plan which allows them to report up to $25,000 in bills. The company's growth metrics in 2022 are undeniable:
- 105% ARR growth during the past month
- 83% member growth during the past month
- A minimum of 50% month-over-month ARR and member growth since its June public launch
- A doubling of average bills per account that demonstrates member engagement and retention
"StellarFi offers versatility in credit-building payment options," said Zarrad. "On top of household bills, StellarFi members also have paid bills such as child support, medical co-pays and Tesla Supercharger memberships to build credit. The opportunity to build credit through StellarFi is massive."
StellarFi's talented team comprises experienced fintech startup veterans. The company's leaders have built two unicorns and achieved five exits. Key hires since StellarFi's launch include Chief Marketing Officer Daniel Kjellen, Vice President of Finance and Operations Josh Holley, Vice President of Product Kevin Phillips and Vice President of Engineering Geoff Massanek.
The fintech startup has established key strategic partnerships with credit bureaus Experian®, Equifax® and Transunion®; along with a partnership with the National Foundation for Credit Counseling, which StellarFi announced in June; and marketing and affiliate collaborations with Chime, Homebuyer.com, Scholly, and Steady.
Founded in Austin, Texas, as a public benefit corporation, StellarFi is on a mission to disrupt the U.S. poverty cycle by opening access to credit to the 150 million Americans who currently have poor credit or no credit. StellarFi empowers members to dramatically increase their credit scores using their everyday bills and payments such as rent and utilities, which StellarFi reports directly to the three main credit bureaus—Experian®, Equifax®, and TransUnion®. Driven by his prior success in tackling complex financial problems, StellarFi founder and CEO Lamine Zarrad plans to expand financial equity nationwide and support millions in their journey toward financial security. Visit stellarfi.com for more information.
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