The London fintech startup Portify has raised £7 million in a Series A funding round, for its platform to help gig economy and self-employed workers manage their finances, according to TechCrunch.
In addition to financial planning with Open Banking to track and plan finances through a mobile app, the company also wants to help workers access credit and loans. Both solutions could be important for self-employed workers, who often face a fluctuating cash flow, with difficulties building credit and qualifying for the personal loans that could help balance the ups and downs of their income. Gig work represents a growing portion of the economy—in the US, one-third of the workforce has taken on project-based work.
According to co-founder and CEO Sho Sugihara:
“Many modern workers are essentially tiny businesses/sole traders and face issues that any SME [small and medium-sized enterprises] would face, like fluctuating earnings and turnover. While there are many products out there serving cash flow issues for large SMEs, our modern worker segment is extremely underserved. They fall somewhere between a consumer and business in the eyes of incumbent financial institutions who don’t really know how best to serve them. We see a big opportunity there, and are going after it.”
Sugihara first founded the company in 2017, and in 2018, they raised £1.3 million in a seed funding round.
Until recently, Portify’s platform was available only through partnerships with companies such as Deliveroo. There was no way to access the app without working for one of these select partner platforms.
“We did this because we wanted to make sure we were 100% focused on our target modern worker persona, and helping to financially include them. But once we started working closely with our initial users, we realized that while being modern workers, many of them also fell into the ‘credit invisible/thin-file segment, lacking access to basic financial products,” Sugihara said.
For many gig and self-employed workers, he says “unconventional, fluctuating earnings pattern” put them into this thin-file credit category. Portify has now started to work with credit reporting bureaus to share data from their app to help improve credit scores, with permission from each user.
The company says it will also use the new funding to develop its own credit line for personal loans. The revolving credit line has a maximum of £250 currently, but Portify plans to increase it to £500 to £1,000 for select users.
The latest funding round was led by Redalpine and included existing investors Kindred and Entrepreneur First.