Pay Bills

Ivella is the latest fintech focused on couples banking, with a twist – TechCrunch

Money can make people moody. There are layers of privilege, or lack thereof, that can make even the simplest conversation about bills feel like baggage to manage. Translate that discomfort into relationships and it can feel like an awkward — and fragmented — dance over who pays what bill when (and how).

Ivella, a Santa Monica-based startup, wants to create banking products for couples to take away some of those tensions. Led by CEO and Co-Founder Khalil Lalji, the startup is launching with a shared account product that just raised $3.5 million in funding from Anthemis, Financial Venture Studio, and Soma Capital. Other investors include Y Combinator, DoNotPay CEO Joshua Browder and Gumroad CEO Sahil Lavingia.

Lalji, who helped creators with digital content before entering the world of fintech, says the startup was born out of his own frustration with the expectation that couples would use Venmo unless they were married. . The best solution, so far, has been joint accounts: which means that two people will create an account where they – sing it with me now – join their accounts and draw from the same pool. Instead, Lalji wants to create a shared account: couples maintain individual accounts and balances, but get an Ivella debit card linked to those two accounts.

With this shared card, couples can set ratios — perhaps pro-rated the percentage of each bill someone pays based on their income — and Ivella will automatically split any transactions made using the debit card. Ivella.

That in itself was the biggest technical challenge Ivella faced in her early days, Lalji describes. He said peer-to-peer platforms were still splitting payments “in a very rudimentary way”, while Ivella wanted to intercept transaction authorizations so people were only charged according to their ratio. “We have real-time decision logic to determine what the balances of these two user accounts are? Can both users support their payment end based on their default split? If that’s the cases, move the money and then send back an approval.The company created an internal ledger to track how money moves between user accounts, in a way the co-founder thinks many other fintechs do not.

That’s not how the boot started. The first iteration of Ivella looked, he admits, like a P2P transfer platform with a better UX. The team quickly saw problems: “One of the main failure factors of the previous iteration was that payments and payment networks only interacted with a single user account.” For example, if you try to make a transaction for $100 for which you and your partner each have $50, he will reject the payment because he will only see one account; or, on the other hand, if you only have $100 in your account but your partner only has $0, the payment will be approved even if your partner does not have enough money to meet their end of the bargain .

“The place where a lot of people fail, just like a lot of fintech fails, is that they don’t break the mold of what banking looks like,” Lalji said. “And because we’re specifically focused on couples, we want to create a product that doesn’t feel so sterile and not just like a bank.”

Ivella not only competes with the joint account theory pushed by incumbent banks, but also with venture capitalist-backed startups looking for a multiplayer fintech world.

Braid, another startup working on social fintech, recently launched “Pools” as a variation of consumer payment links. People can set up a braid pool around any endeavor — a fund for this summer’s trip to Italy, shared car gas expenses, or a kitty to put toward monthly book club snacks. – then send a link to friends who want to put money. The money then goes directly to the wallet and the creator can manage it alone or with participants. The startup raised a $9 million seed round from investors including Index and Accel in 2020.

Zeta, which raised a $1.5 million funding round last year, wants to make joint accounts more collaborative and transparent. Many standard joint accounts simply give each user full access to other users’ finances, while Zeta wants to give people a more flexible way to share money.

Zeta CEO Aditi Shekar told TechCrunch she sees a strategy to split finances as a response to a “temporary” mindset.

“Our goal is to work with couples who have reached the point in their relationship where they are less focused on separating and more focused on sharing. That’s a key difference in mindset,” he said. she said, “And, in our view of the world, also one that has long-term value to offer.”

She added that “we believe that once a couple shares, there still needs to be flexibility around the sharing…but the basic dynamic is that you’re a team, working together on your finances.”

Lalji said Ivella will focus on products to support couples at any stage of their relationship, including joint accounts, credit products and joint, long-term investment products. Yet Zeta asks a question that Ivella needs to answer: is their startup’s primary customer base – couples who are about to get married/joint account but not yet married/ready for a joint account – sufficiently important to venture? The recent surge says yes, but given the recent struggles of fintech as an industry as a whole, Ivella needs to prove it can lower customer acquisition costs and increase stickiness.

Today, Ivella’s core monetization strategy is through the revenue it derives from interchange fees. Lalji said Points and Rewards will launch as part of a premium subscription that will include additional features, such as the ability to import and split transactions not made on the Ivella card.