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Four-year-old California based company Activehours provides its users with a portion of their paycheck before the user receives it. The cash advance is available almost immediately after the user’s shift ends.
A great feature of this app is that users don’t have to pay any interest on their lending. Users are instead encouraged to leave a tip to the company that provides them with this service.
This new financial technology innovation sets payday lenders in its sights. Payday lenders often have almost extortionate rates of interest and this is where Activehours has a huge advantage. Another big advantage of the app is that it’s simple and completely controlled by the user.
Repeat funding for Activehours
Back in January 2017, Activehours raised $22 million in series A funding, and before that, the company raised $4.1 million in seed funding.
Fintechinvestmentreviews.com hears that Activehours has done it again, raising $39 million for its new take on cash advances. This latest boost in funding comes just nine months after its last cash injection.
Led by Andreessen Horowitz and the company’s early-stage investors, Matrix Partners, Ribbit Capital and March Capital Partners, Activehours has managed to raise nearly $65 million since the company’s launch in 2013.
Activehours is proving that people will pay the optional tip for lending money. The maximum lending amount is $100 and there is a 15% cap on tipping.
Giving consumers control
A big selling point of Activehours is that it puts the consumer in complete control of their lending, unlike more traditional payday lenders. Many times, the lender will tip an amount that is similar to payday lending rates, but because they choose exactly what they want to tip, the choice is theirs.
When we consider that Americans pay $32 billion in bank overdraft and non-sufficient funds fees or $9 billion in payday lending fees, it’s clear that the numbers add up for many people in need of a viable alternative to traditional lending.
It’s clear that Activehours offers a great alternative and will continue to expand with additional funding.
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