Float, the millennial-focused fintech app, emerged from stealth mode this week.
The startup, which recently completed the 500 Startups accelerator, revealed a $3 million angel investment coming from a number of high-profile contributors.
The company's product aims to eliminate the $17 billion overdraft market by offering "thin-file," individuals with minimal or no credit history, access to small lines of credit. Typically, banks charge $35 for overdraft fees.
“We believe that access to affordable credit should not be reserved just for those with a lot of credit history and prime FICO scores,” Max Klein, co-founder and chief executive officer, said in a statement. “As someone with plenty of experience dealing with overdrafts, I know the frustration first-hand felt by 40 percent of my peers. I was getting charged a $35 overdraft fee for buying a $5 latte. We built Float to help consumers avoid costly overdraft charges while empowering them to begin building credit with transparent, affordable, and accessible living capital.”
The app is able to underwrite anyone with a checking account via a smartphone app without pulling their FICO score by pulling their transactional data.
The round was led by fintech fund Camp One Ventures, with contributions coming from Funders Club, Silicon Valley Bank and MasterCard accelerator programs.
"Working with Camp One was extremely important to us," said co-founder Kevin Bass. "Because they invested at a point where we were pre-product, they had insights into the space and saw the vision. They were much more willing to take a risk on our value proposition than a traditional VC."
Angel investors include Varsha Rao of Airbnb, Mark Schulze of Clover Networks, Bryan Bradford. Arlan Hamilton, who runs a fund that invests in startups led by underrepresented founders in the U.S., also contributed to the round.
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