first round
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With $20M A round, Promise brings financial flexibility to outdated government and utility payment systems
The last year has been one of financial hardship for billions, and among the specific hardships is the elementary one of paying for utilities, taxes and other government fees — the systems for which are rarely set up for easy or flexible payment. Promise aims to change that by integrating with official payment systems and offering more forgiving terms for fees and debts people can’t handle all at once, and has raised $20 million to do so.
When every penny is going toward rent and food, it can be hard to muster the cash to pay an irregular bill like water or electricity. They’re less likely to be shut off on short notice than a mobile plan, so it’s safer to kick the can down the road… until a few bills add up and suddenly a family is looking at hundreds of dollars of unpaid bills and no way to split them up or pay over time. Same with tickets and other fees and fines.
The CEO and co-founder of Promise, Phaedra Ellis-Lamkins, explained that this (among other places) is where current systems fall down. Unlike buying a TV or piece of furniture, where payment plans may be offered in a single click during online checkout, there frequently is no such option for municipal ticket payment sites or utilities.
“We have found that people struggling to pay their bills want to pay and will pay at extremely high rates if you offer them reminders, accessible payment options and flexibility. The systems are the problem — they are not designed for people who don’t always have a surplus of money in their bank accounts,” she told TechCrunch.
“They assume for example that if someone makes their first payment at 10 PM on the 15th, they will have the same amount of money the next month on the 15th at 10 PM,” she continued. “These systems do not recognize that most people are struggling with their basic needs. Payments may need to be weekly or split up into multiple payment types.”
Even those that do offer plans still see many failures to pay, due at least partly to a lack of flexibility on their part, said Ellis-Lamkins — failure to make a payment can lead to the whole plan being cancelled. Furthermore, it may be difficult to get enrolled in the first place.
“Some cities offer payment plans but you have to go in person to sign up, complete a multiple-page form, show proof of income and meet restrictive criteria,” she said. “We have been able to work with our partners to use self-certification to ease the process as opposed to providing tax returns or other documentation. Currently, we have over a 90% repayment rate.”
Promise acts as a sort of middleman, integrating lightly with the agency or utility, which in turn makes anyone owing money aware of the possibility of the different payment system. It’s similar to how you might see various payment options, including installments, when making a purchase at an online shop.
Image Credits: Promise
The user enrolls in a payment plan (the service is mobile-friendly because that’s the only form of internet many people have) and Promise handles that end of it, with reminders, receipts and processing, passing on the money to the agency as it comes in — the company doesn’t cover the cost up front and collect on its own terms. Essentially it’s a bolt-on flexible payment mechanism that specializes in government agencies and other public-facing fee collectors.
Promise makes money by subscription fees (i.e. SaaS) and/or through transaction fees, whichever makes more sense for the given customer. As you might imagine, it makes more sense for a utility to pay a couple bucks to be more sure of collecting $500, than to take its chance on getting none of that $500, or having to resort to more heavy-handed and expensive debt collection methods.
Lest you think this is not a big problem (and consequently not a big market), Ellis-Lamkins noted a recent study from the California Water Boards showing there are 1.6 million people with a total of $1 billion in water debt in the state — one in eight households is in arrears to an average of $500.
Those numbers are likely worse than normal, given the immense financial pressure that the pandemic has placed on nearly all households — but like payment plans in other circumstances, households of many incomes and types find their own reason to take advantage of such systems. And pretty much anyone who’s had to deal with an obtusely designed utility payment site would welcome an alternative.
The new round brings the company’s total raised to over $30 million, counting $10 million it raised immediately after leaving Y Combinator in 2018. The funding comes from existing investors Kapor Capital, XYZ, Bronze, First Round, YC, Village, and others.
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Sora raises $5.3M to power its HR automation service
Think back to the last time you onboarded at a new job. Was it a mishmash of documents and calendar invites and calls and, generally speaking, a mess?
Probably. That’s likely because onboarding is a process that often depends on disparate, unconnected HR tools. Sora, a startup that today announced $5.3 million in collected fundraising, wants to shake up the HR software world with a low-code service that helps companies connect their tooling and automate their HR processes. The startup might be able to make things like onboarding better for employees and companies alike.
Low-code, no-code
Startups looking to bring low, and no-code tooling to non-engineering teams have become a trend in recent quarters. TechCrunch recently covered a $2.2 million round for no-code text analysis and machine-learning shop MonkeyLearn, for example. There have been hundreds of millions of dollars raised by low, and no-code tools in 2020 alone.
By building tools to assist non-engineers do more, faster without developer help — be it analysis, or visual programming — some technology upstarts are helping non-technical teams do what only technical teams were able to in previous years.
Sora fits into the trend because its service allows non-developers to create workflows, to use a term that the startup’s co-founder and CEO Laura Del Beccaro employed when she walked TechCrunch through her company’s product.
The Sora workflows can be built from templates, and employ triggers to fire off various processes (sending emails, pulling in data from other apps and services, that sort of thing), allowing non-engineers to create visual logic flows. The Sora system is “like a no-code workflow builder,” Del Beccaro said in an interview, allowing users to “add tasks where you have to tell someone to do something, and automate the follow-up. That’s actually one of our biggest pain point relievers. A lot of HR teams right now are manually tracking people down: Did you set up this laptop yet? Did you set up this new hire launch for these three people?”
Sora CEO Laura Del Beccaro, via the company.
The Sora workflow system is slick in practice, allowing, for example, customization around a single employee. Del Beccaro explained that her startup’s software can do things like ask a manager who a new hire’s work-buddy might be, and then send that person an email later saying that the hire has arrived.
According to Del Beccaro, Sora, wants to help “democratize your [HR] processes.” Today’s HR denizens are too dependent on data analysts for “people analytics reporting” she said, adding that once a company has all its HR “data in one place, which again, is our core offering, you can set up all these automations that you want by yourself, you don’t have to go to IT or engineering.”
And because Sora can handle swapping out different providers as needed, Sora should help HR teams at growing companies lower the “risk of changing systems,” helping them “stay flexible no matter what [their] processes look like.”
It’s a neat tool.
Money
Sora has raised $5.3 million in capital to date, a funding total that includes a pre-seed round from September, 2018. First Round and Elad Gil led its most recent round, which makes up a majority of its capital raised thus far.
With 11 employees today, Sora has around “25 people on [its] cap table,” the CEO said, telling TechCrunch that it was “pretty important to [her] to have a relatively diverse set of investors.” Del Beccaro provided this publication with a full list, which we’ve included below.
Sticking to the subject of money, after Mixpanel served as an early customer, Sora opened to more customers earlier this year. The CEO said that its customers are on one or two-year contracts, and charges per-employee, per-month, which seems reasonable. With its new cash, Sora has around 2.5 years of runway she said.
First Round’s Bill Trenchard liked Sora’s approach to building its service, saying in an email that the company was “never interested in scaling for the sake of scaling,” highlighting its work in concert with “a development partner to make sure what they were working on was actually solving real HR pain points before they took it to the market” as evidence of its “thoughtful and intentional” product approach.
Today, thanks to that method, in his view “what’s compelling about Sora is their sales momentum this year after launching,” the investor said. The next question for Sora, then, is how fast it can grow now that it has more capital in the bank than it has likely ever had before.
For fun, here’s the full investor list that Del Beccaro provided, which I’m including as it’s rare to get a full cap table:
- Sarah Adams (Plaid)
- Shan Aggarwal (Coinbase, Greycroft)
- Scott Belsky (Adobe)
- Mathilde Collin (Front)
- Cooley Investment Fund
- David Del Beccaro & Arleen Armstrong (Music Choice/Legal)
- Viviana Faga (Emergence Capital)
- Avichal Garg (Electric Capital)
- Elad Gil
- Kent Goldman (Upside VC)
- Jonah Greenberger (Bright)
- Daniel Gross (Pioneer, YC)
- Charles Hudson (Precursor Ventures)
- Todd Jackson (First Round Capital)
- Oliver Jay (Asana)
- Nimi Katragadda (BoxGroup)
- Nicky Khurana (Facebook)
- Brianne Kimmel (Work Life Ventures)
- David King (Curious Endeavors)
- Fritz Lanman (ClassPass)
- Lisa & Mat Lori (Perfect Provenance/New Mountain Capital)
- Shrav Mehta (SecureFrame)
- Sean Mendy (Concrete Rose)
- Jana Messerschmidt (#ANGELS, Lightspeed)
- Katie Stanton (Katie Stanton, #ANGELS, Moxxie Ventures)
- Erik Torenberg (Village Global)
- Bill Trenchard (First Round Capital)
- Jeannette zu Fürstenberg (La Famiglia VC)
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