Our Investment in FloatMe
by Seth Levine
Most Americans live without an adequate financial safety net. According to a 2021 Bankrate survey, 25% have no emergency savings at all, and it’s estimated that as much as 69% of the population has less than $1,000 in savings. There are many reasons for this. Stagnant wages, increased cost of living, student loan debt, and exploding healthcare costs are all contributing factors. The COVID-19 pandemic has further exacerbated the situation. Many people with unexpected bills end up turning to credit cards or high interest, short-term loans to solve their immediate financial problems. FloatMe provides an alternative.
Launched in 2020, FloatMe offers its members interest-free, short-term “Floats” up to $50, along with overdraft protection and other financial literacy tools. For a small monthly fee ($1.99), customers can link their bank accounts to the app to track spending and contribute to savings. Floats are low-dollar amounts by design, to prevent over-borrowing, which creates a vicious cycle in which compounding interest and aggressive repayment schedules require a borrower to take the same loan repeatedly.
Co-founder and CEO, Josh Sanchez, is deeply committed to helping people cultivate smart financial habits that build security and ultimately wealth. His personal experience with taking a bad loan that resulted in overdraft fees informs his passion for what FloatMe is building. Unlike many companies operating in the payday advance space, FloatMe’s mission is to move its members away from needing short-term loans on an ongoing basis and expand their capabilities in managing their money.
Financial wellness is a growing industry, and tech-enabled financial wellness even more so. Both individual consumers and employers are seeing the need for tools that make managing personal finances intuitive and accessible. The market for these services is expected to surpass $800M by 2024. Platforms like FloatMe that empower consumers are well-positioned to capture a meaningful share of that.
Josh has shown tremendous resourcefulness and grit in getting FloatMe off the ground. He participated in two incubators, ran an Indiegogo campaign, and was awarded a grant by Venture for America in 2019. Our recent Series A investment, made alongside ManchesterStory, Active Capital, Michal Cieplinski (Chief Business Officer, Pipe), Jordan Wright (Co-founder & CEO, Atomic), and John Henry Matos (CEO, LOOP, a Foundry portfolio company) will allow Josh to scale the team and continue to build products and services for the FloatMe community. We couldn’t be happier to partner with him as he works to make FloatMe the “Best Financial Friend” for more and more Americans in need of financial wellness.