Credit-Building Platform Stellar Raises $7 Million Seed Round
Thanks to the current FinTech landscape, there are now several ways of establishing credit. This includes options such as credit-builder loans, debit cards that act as secured credit cards, and even regular credit cards and loans that utilize alternative decision-making methods. Now, a startup with yet another idea on how to help consumers improve their finances has garnered a significant investment.
This week, Stellar announced that it had raised $7 million. The oversubscribed seed round was led by Acrew Capital, while Trust Ventures co-led. Accomplice Ventures, Fiat Ventures, Vera Equity, Permit Ventures, Kindergarten Ventures also participated along with angel investors. With the money, the company will officially launch its product, with the public beta now underway.
Stellar is a platform that aims to help consumers build credit. To do this, the service will consolidate users’ bills and pay them on their behalf. In turn, Stellar will report these on-time payments to credit bureaus to establish positive history. Additionally, the company notes that customers can earn rewards and cashback that can be redeemed when paying their connected bills.
Currently, the company has a waitlist open for its service, with those who sign-up also being entered into a sweepstakes that will see one winner seeing up to $10,000 of their bills paid for a year, 20 winners scoring $500 to be applied to their bills, and an additional 300 winners receiving $100 in bill pay credits. Looking ahead, Stellar says it also plans to add further money management tools and financial literacy resources, while also working with other brands to feature loan and credit card offerings.
Speaking to Stellar’s mission, Founder and CEO Lamine Zarrad explained, “We created Stellar to provide credit access to the 132 million Americans who currently have poor credit or no credit. That’s in large part because traditionally, credit scores are made up of a person’s payment history on loans and credit cards. This means bills for everyday purchases like rent, utilities, and Netflix go unreported… We want Stellar to let their bills pay them back–something they’ve deserved for a very long time.”
Zarrad went on to say, “As an immigrant and a former enlisted Marine, I know how difficult it is to build and maintain financial stability. With Stellar, we wanted to distill years of learnings into a simple app that transforms ordinary household bills into value-generating assets. I am absolutely thrilled to embark on this journey with an amazing crew and top-notch investors!”
As noted, there are a variety of FinTech startups looking to change the way credit is established or utilized. Nevertheless, Stellar’s platform seems to have another spin on the idea and one that could prove popular. With the company just now launching its public beta, we’ll soon get to see exactly what the product has to offer and whether it has what it takes to compete with other existing concepts.