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

Money can make people moody. Having multiple layers of perks, or lack thereof, can make even the simplest conversation about bills feel like baggage to deal with. Transfer that discomfort to relationships, and it can feel like an awkward — and disjointed — dance about who gets to pay what bills when (and how).

Ivella, a startup based in Santa Monica, wanted to build banking products for couples to ease some of this stress. Led by CEO and co-founder Kahlil Lalji, the startup that’s launching with a split-account product, has 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 has helped creators with digital content before entering the fintech world, says the startup was born out of his own frustration with the expectation that couples will only use Venmo unless they are married. The best solution, by far, is joint accounts: that is, two people will set up an account where they – sing with me now – join their accounts and withdraw from the same group. Instead, Lalji wanted to build a split account: couples maintain individual accounts and balances, but receive an Ivella debit card linked to both of those accounts.

With that shared card, couples can set a rate – which can be calculated as a percentage of each bill someone pays depending on their income – and Ivella will automatically split any any transaction made with an Ivella debit card.

Lalji describes this as the biggest technical challenge Ivella faced in its early days. He said that peer-to-peer platforms still split payments “in a very crude way”, while Ivella wants to block transaction authorization so that people are only charged at the rate they set. “We have some real-time decision logic to determine the balances of these two user accounts? Can both users support ending their payments based on their default split? If so, transfer the funds and then resubmit an approval.” The company built an internal ledger to track how money is moving between user accounts, in a way the co-founder argues that a lot of other fintechs don’t.

This is not the way to start, well, get started. He admits that the first iteration of Ivella looks like a P2P streaming platform with better UX. The team recognized the problems early on: “One of the biggest failure modes of the previous iteration was that payment networks and payment networks only interact with one user account.” For example, if you are trying to do a $100 transaction where you and your partner each have $50, it will refuse to pay because it will only see one account; or vice versa, if you only have $100 in your account but your partner has $0, the payment will be approved even if your partner doesn’t have enough money to close the deal. quantity.

“The point where a lot of people fall short, like many fintechs fall short, is that they don’t break the mold of what the bank looks like,” Lalji said. “And because we’re specifically focused on couples, we wanted to build a product that’s not too sterile and doesn’t look like a bank.”

Not only does Ivella compete with the theory of joint accounts promoted by incumbent banks, but also venture-backed startups seeking a multiplayer fintech world.

Braid, another startup working on social fintech, recently launched “Swimming Pool” as a turning point in consumer payments linkage. People can start a Braid Pool around any endeavour – funds for a trip to Italy this summer, shared car gas costs, or a kitten to buy a book club’s monthly snacks – and then send the link to the people you want to top up. The funds then go directly to the wallet and the creator can manage it alone or together with the participants. The startup raised a $9 million seed round from investors, including Index and Accel, in 2020.

Zeta, raised $1.5 million seed fund last year, wants to make shared accounts more collaborative and transparent. Many standard joint accounts just give every user full access to other users’ finances, while Zeta wants to give everyone a more flexible way to share funds.

Zeta’s CEO, Aditi Shekar, told TechCrunch that she sees a strategy to split finances as the answer to “temporary” thinking.

“Our focus is on working with couples who have reached a point in the relationship where they are less focused on breaking up and more focused on sharing. That’s the main state of mind difference,” she said. “And, according to our worldview, it is also a worldview that has lasting value to offer.”

She added that “we believe that once a couple is sharing, there is still a need for flexibility in sharing… but the core driving force is that you are a team, working together on finances. mine”.

Lalji said Ivella will focus on products that support couples at any stage of their relationship, including joint accounts, credit products and joint, long-term investment products. However, Zeta raises a question Ivella needs to answer: Is their startup’s core customer set – couples getting married / joint accounts but not married / ready for finance joint account – is it big enough for a joint venture? Recent gains suggest yes, but given fintech’s recent struggles as a sector in general, Ivella needs to demonstrate it can get low customer acquisition costs and engagement. high.

Today, Ivella’s core monetization strategy is through the revenue it generates from exchange fees. Lalji said points and rewards will be rolled out under a paid subscription that includes some extras, such as being able to import and split transactions not made on the Ivella card.

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