Method, an embedded debt repayment firm based in Austin, has acquired $16 million in Series A funding from investors, including SV Angel, Y Combinator (Method graduated from Y Combinator), Truist Ventures, Abstract Ventures, and others.
Andreessen Horowitz managed the round. Mit Shah, the co-founder, says the additional funding would go toward increasing the company’s workforce from 8 to 28 by the end of the year and product development.
Method was established in 2021 by Marco del Carmen and Jose Bethancourt, who has firsthand knowledge of the challenges of incorporating financial liabilities into their former business, GradJoy.
We provide fintechs the ability to innovate faster and compete with larger banks with our turnkey real-time data and payment operations.Mit Shah, co-founder of Method
Shah said in an email interview with TechCrunch that Marco and Jose (co-founders) saw a chance to offer designers an interactive API to incorporate debt payback into their services and applications.
He also added that they launched Method to offer turnkey infrastructure to developers. Shah highlights that there isn’t a standard, simple way to access a person’s financial commitments, such as student loans, mortgages, credit cards, and other debts, and push payments to those loans.
Method has raised a total of $18.5 million to date through venture capitalists.
Given the absence of standardization, emerging fintech have turned to deploy login credential-based ways and screen scrapers to access and aggregate data.
However, there’s a drawback to those strategies. New financial institutions can take some time to integrate, and since there’s no direct connection, it’s impossible to carry out tasks like loan payments on behalf of users.
As per Shah, the sector has been hunting open finance by creating user credential-based solutions and working discreetly with financial organizations. They go directly to the origin, enabling write and read access for all consumer liabilities.
How Does Method Work?
The Method utilizes consumer credit access restrictions enacted in the Dodd-Frank Act 2010. Method can collect a person’s financial commitments across more than 60,000 organizations in the U.S.
They can initiate tasks such as payoffs, balance transfers, bill pay, and more by utilizing identity verification information from wireless carriers (e.g., T-Mobile) and credit bureaus (e.g., Equifax) and integrating it with actual information from financial institutions’ core banking systems.
We’ve seen demand for our product from all areas of traditional finance and new-age fintechs in the lending, debt consolidation, and personal finance management space.Mit Shah, co-founder of Method
With the help of Method’s data API, customers and consumer-facing companies can obtain the user’s entire financial liabilities by providing their phone number.
Once linked, the repayment accounts are immediately accessible and payable, according to Shah. On the other hand, the payment API for Method enables users to send money to a consumer debt or any bill.
Method controls the entire money flow from start to finish, excluding you from the process.
Method currently has 35 clients, over 75,000 customers, and an average recurring income of about $2.25 million per year.
Method deals with many sensitive documents, which may give some clients pause. Shah stated that Method only gathers “minimal user data” and doesn’t sell customer information to third parties to address consumer advocates’ concerns.
To further build trust, the business intends to develop a portal where customers can sign in with Method to oversee the information they transfer with other services and apps.
While competing with well-known brands like MX, Plaid, Dwolla, and Spinwheel, Shah believes Method will hold its own, especially when the platform introduces new capabilities over the next months.
These include immediate balance transfers, real-time credit card transactions, and improved live data scores for payables.