Altro has raised $18 million to help you build credit just by paying for your Netflix subscription – TechCrunch

Michael Broughton was the first in his family to go to college. But he almost didn’t, when he struggled to get the funding to pay his tuition.

The experience stuck with him, and when he met Ayush Jain at the University of Southern California, the pair bonded over their belief that access to credit should be free. They came up with the idea of ​​helping people build credit through recurring forms of payment such as digital subscriptions to Netflix, Spotify, and Hulu.

In December 2019 they started Other – which started out as Perch Credit – and started moving into a Hacker House with a few others to create a platform that finds a person’s recurring transactions and connects them to a trading line that they reports to all three credit bureaus. For those unfamiliar, a trade line is a line of data that goes directly into an office’s system that affects a person’s FICO score, which is used for underwriting.

“What we have built is not an alternative or supplement,” Broughton said. “We don’t create our own score, but rather a direct correlation to your actual score improvement over time, which a user can see in our app.”

Participating services include, but are not limited to, YouTube Premium, Dollar Shave Club, Adobe Creative Cloud, Nintendo Online, Apple Music, SoundCloud, Xbox Live, Amazon Prime, HBO Max, and DisneyPlus.

“Users would pay a fee anyway, but a percentage comes back to us rather than the companies,” Broughton told TechCrunch. “We don’t want to charge users for access to something they already have.”

Picture credits: Other

The company attended pitch contest after pitch contest, raising around $100,000, until one day in the summer of 2020, an analyst for musician Jay-Z, Marcy Ventures, found himself in the audience.

The next day, the company sent a check for $250,000 to the company, kicking off its funding round and prompting Broughton to drop out of college to focus on growing Altro.

“It was a 48-hour turnaround, and it was the first money we’ve ever raised outside of pitch competitions,” he told TechCrunch.

By the time it raised its $2.5 million funding round in December 2020 in a round that included participation from Citigroup and SoftBank Opportunity Fund — among others — Altro had a few thousand customers. In 2021, the app went viral after Jay-Z’s Marcy Ventures wrote a blog post about it.

“We had over 200,000 downloads and made it into the top 10 on the App Store,” Broughton recalls. “Thousands of videos were made about Jay-Z, changing the way people think about credit. We had to create a waiting list.”

Picture credits: Other

The company, overwhelmed as it was, told people on the waitlist that if they needed immediate access to credit, let them know. Within 24 hours, he received over 3,000 responses from people sharing very honest stories of being stuck in abusive homes and needing credit to get out.

Altro then participated in Y Combinator’s 2020 summer bundle.

And today, the startup is announcing that it has raised $18 million in a Series A funding round led by Pendulum, with participation from Marcy Ventures, as well as Citi Ventures, Black Capital Fund, Concrete Rose Fund and individual investors such as Dick Parsons and Deborah Quazzo, among others.

Altro plans to use his new capital to continue to grow his credit and financial literacy program as well as grow his team. For example, Altro focuses on educating users through a catalog of over 350 educational audio clips covering topics like cryptocurrency, investing, and trading. Watching previews, the company says, not only makes users more financially savvy, but also positively impacts user scores the more they engage.

“A lot of our marketing has been earned, we haven’t put a dollar into it yet,” Broughton said. “But now we need to build a marketing team so we can help more people per user and grow the brand.”

It also plans to soon allow people to build up credit by paying their rent on time, an offer that was available on its platform before and will be reintroduced in the coming months.

It was important to Broughton and Jain that their the app to be completely free to users, as they viewed services that charged users for access to credit as predatory. Altro therefore monetizes the exchange, or rather the activity carried out thanks to the expenses. The company’s subscription partners pay Altro a fixed percentage of what its users pay them directly. In a nutshell, Altro has forged relationships with Visa and Mastercard, which give the startup a percentage of the business done with those providers.

Joanna Rees, current FICO board member and venture studio partner Westjoined Altro’s board of directors as part of its new funding and is an investor in the company.

Rees told TechCrunch she was inspired by Broughton.

Her life experience and purpose in building the business came from a personally understood need and authenticity,” she said. “I also understand the immediate opportunity to further expand the credit market through my role on the FICO Board of Directors.”

She went on to say that, as its name suggests — Altro means “other” in Italian — the startup is able to count other payments people make to demonstrate their creditworthiness, which she and others at FICO believe to be unique in the market.

“Subscription data in particular is a big opportunity,” Rees told TechCrunch. “Altro combines this with accessible educational content that will enable “others” to participate in credit markets and the benefits that flow from it to improve the quality of their lives.

Pendulum managing partner Rish Sinha also said Broughton’s story “really resonated” in his business.

The fact that a military child raised overseas could not access credit speaks to a deeply flawed system, and his determination to solve the problem he himself had encountered was compelling,” he said. he told TechCrunch. “There are 45 million underbanked Americans in the United States, many of whom are people of color. Lack of access to credit fundamentally prevents them from improving their families’ livelihoods. Platforms like Altro can foster changes that will improve people’s lives and also help this country achieve greater economic potential.