Technology

Seattle startup Level sees growth for flexible credit service used by independent contractors

Level CEO David Edelstein. (Level Photos)

Millions of independent contractors are making money in the gig economy, but many don’t have access to financial credit services to help grow their personal microbusinesses.

Level wants to help. The Seattle startup partners with marketplace platforms such as Dolly and Keepe, which use Level to offer workers flexible credit options that are only paid back when they earn.

Level CEO and founder David Edelstein said the company is seeing traction amid the pandemic as both supply of workers and demand for on-demand services rises. Level is on track to extend more than $1 million in cash advances by the end of the year.

“We identified an opportunity to empower people in the rapidly growing on-demand economy to grow their microbusinesses, while addressing challenges faced by labor marketplaces seeking to grow their companies,” Edelstein said.

Level graduated from Techstars Seattle last year. Edelstein previously was director of the Grameen Technology Center, and spent time at Caribou Digital, Microsoft, and McKinsey.

Level is the latest fintech startup out of the Pacific Northwest. The Seattle region has a growing cohort of fintech startups, and firms such as Madrona Venture Group are making an effort to expand Seattle as a fintech hub.

We caught up with Edelstein for this edition of Startup Spotlight. Continue reading for his answers to our questionnaire.

Oscar, a Level customer, is building his microbusiness with the help of the Seattle startup. He bought this trailer using Level’s credit services.

What does your company do? Level delivers embedded financial services to independent contractors, who are increasingly building microbusinesses on the rails of our partners: labor marketplaces and on-demand platforms. Our first product, the Level Advance, delivers flexible and transparent credit, giving people the opportunity to invest in productive assets, access working capital, and grow their microbusinesses. As we deepen our partnerships, we will extend a range of financial services designed around specific needs of this large and rapidly growing customer segment.

Inspiration hit us when: We realized that people earning on labor marketplaces are often better thought of as microbusinesses that need access to a similar set of financial tools as other micro- and small businesses. With this insight, we repositioned ourselves from serving a large group of consumers to delivering appropriate financial products to millions of microbusinesses.

At the same time, we gained a deep understanding of the challenges that our partners face around attracting and retaining these microbusinesses, recognized that access to appropriate financial services was the underlying root of their problems, and identified a solution which compellingly addressed the needs of both sides of the market.

VC, Angel or Bootstrap: Techstars (Seattle ‘19) served as our launchpad. Angels provided extra fuel to get us off the ground and many have also made investments in our credit facility. We’ve built compelling economics and we will continue to raise angel funding to supplement our positive unit economics as we methodically scale.

Our ‘secret sauce’ is: Lots of passport stamps and a healthy amount of gray hairs. Our team consists of second and third time founders with deep expertise and knowledge of developing and delivering financial services, building financial technology and operating with excellence. We’ve seen a lot in our careers, both starting companies and leading teams and businesses at McKinsey & Company, Amazon, Starbucks and Microsoft, and have the perspective and experience necessary to make well-informed decisions and build a successful business.

The smartest move we’ve made so far: Listening. We rely on customer and partner feedback to drive our priorities, and while we think we have some good ideas, our customers don’t always agree. We continue to use our conversations with customers and partners to develop and fine tune our roadmap.

The biggest mistake we’ve made so far: At first, we relied too heavily on what worked in other countries, launching a hybrid savings/credit product which has been proven in other parts of the world. We convincingly proved that Americans do not take their vitamins.

Which leading entrepreneur or executive would you most want working in your corner? Patrick and John Collison, the founders of Stripe, have defined the payments space in the U.S. Similarly, our ambition is to define how financial services will be delivered to align with the future of work. They have built an impressive company and deliver an exceptional product which touches many dimensions of the rapidly changing financial services landscape. Their knowledge and insights would complement our experienced team at Level.

Our favorite team-building activity is: Heading out on jobs with our customers who work with Dolly and Keepe, two great local companies who have partnered with us from the start. Nothing better than learning together while helping to lug furniture (not to mention the entertainment value to our customers)!

The biggest thing we look for when hiring is: Creative, smart problem solvers who are not constrained by “traditional” methods of delivering financial services. We are taking a wholesale different approach to delivering financial services, and our team reflects that ambition.

What’s the one piece of advice you’d give to other entrepreneurs just starting out: Do things that don’t scale. Get products into customers’ hands quickly and at low cost to rapidly iterate and learn. Listen and constantly learn from and with your customers.

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