Exclusive: Online financial platform Credit Sesame raises $51 million and has its sights set on an IPO
- The financial wellness platform has raised $51 million from investors, including Menlo Ventures.
- The fintech rewards customers with cash when their credit score goes up.
- IPO plans are ‘still on the table,’ CEO Adrian Nazari tells Insider.
- See more stories on Insider’s business page.
Credit Sesame, an online personal finance platform that helps users monitor their credit scores and manage their debt, has raised fresh funding, bought another company, and revived its IPO plans.
The San Francisco-based startup picked up $51 million from a group of investors that include Healthcare of Ontario Pension Plan (HOOPP), Menlo Ventures, ATW Partners, and others. The round puts Credit Sesame’s valuation at nearly $1 billion, about four times more than its last known valuation of $251.7 million, according to PitchBook.
Credit Sesame’s IPO plans are also “still on the table,” founder and CEO Adrian Nazari told Insider, after they were put on hold during the pandemic.
“We’re currently focused on providing impactful solutions for the millions of Americans living paycheck to paycheck,” Nazari said. “We are open to any outcome that will allow us to advance that course at the right time.”
The company last raised $43 million, a combination of equity and debt, in a deal led by ATW Partners in August 2019. At the time, Nazari told TechCrunch that funding was likely going to be the company’s last round before it goes public. But then, the pandemic hit, and like many other startups that were planning to go public, the company paused IPO plans to focus on the business.
The new cash infusion will be used to integrate new platform services to help consumers improve their credit scores and reach their financial goals. As part of that effort, Credit Sesame is acquiring fintech software services startup Zingo to add rent reporting services to its product offerings in the summer of 2021.
“Nearly 80 percent of Credit Sesame’s 15 million members are renters, and this new offering unlocks a significant growth opportunity for the company and financial inclusion for its customers,” the company said in a statement.
As part of its business model, the company rewards customers with cash when their credit score goes up. “We are helping to reverse the perpetual cycle that many credit invisibles currently face,” Nazari said, referring to customers who face challenges getting approved for a loan, or paying significantly more in interest.
The company has also recently surpassed 1 million debit account customers for its online banking service Sesame Cash, which launched in March 2020, and exceeded 200% subscriber growth year-over-year in premium subscription services.
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