Empower has successfully raised $174.5 million over four funding rounds, demonstrating significant investor confidence in its mission. The platform focuses on solving access to credit for 100 million Americans, providing financial services such as cash advances and credit access where traditional systems have failed.
Keep reading to explore the intricacies of Empower's fundraising journey and the investors backing this innovative platform.
What Is Empower?
Empower, founded by Justin Ammerlaan and Warren Hogarth, is a financial technology company based in San Francisco, with additional locations in Melbourne and Stockholm. The company focuses on providing credit access to underserved populations in the United States.
Empower offers services such as cash advances and a subscription service called Empower Thrive, aiming to underwrite individuals typically excluded from traditional financial systems. The company partners with banks like nbkc bank and FinWise Bank to deliver its financial products.
With a team of 51-200 employees, Empower is dedicated to solving access to credit for 100 million Americans who lack fair credit options. The company claims to underwrite 40% of people shut out of the financial system.
How Much Funding Has Empower Raised?
- Seed Round
- Amount Raised: Undisclosed
- Date: May 2017
- Lead Investors: Sequoia Capital
- Motivation Behind the Round: To replace traditional bank apps.
- Unknown Round
- Amount Raised: $4,500,000
- Date: September 2018
- Lead Investors: Initialized Capital
- Motivation Behind the Round: Early funding rounds are generally used for product development and market entry.
- Series A
- Amount Raised: $20,000,000
- Date: March 2020
- Lead Investors: Defy Ventures, Icon Ventures, Initialized Capital, Sequoia Capital
- Motivation Behind the Round: To scale the business, attract more users, and enhance its product offerings.
- Series B
- Amount Raised: $150,000,000
- Date: August 2022
- Lead Investors: Blisce (equity), Community Investment Management (debt financing)
- Motivation Behind the Round: To expand Empower's offerings and provide fair access to credit for underserved communities.
Total Amount Raised: $174,500,000
Current Valuation: Not disclosed
Key Investors
- Sequoia Capital
- Details: Sequoia Capital is a prominent venture capital firm known for investing in early-stage and growth-stage companies. It has a long history of backing successful technology startups.
- Investment Focus Areas: Technology, healthcare, consumer services.
- Notable Investments: Apple, Google, Oracle, PayPal, LinkedIn, Square.
- Initialized Capital
- Details: Initialized Capital is a venture capital firm co-founded by Alexis Ohanian, known for investing in early-stage startups. The firm has a reputation for backing innovative companies.
- Investment Focus Areas: Early-stage technology startups, innovative startups.
- Notable Investments: Reddit, Coinbase, Instacart, Opendoor.
- Icon Ventures
- Details: Icon Ventures is a venture capital firm that typically invests in early to growth-stage technology companies. It has a strong focus on helping companies scale.
- Investment Focus Areas: Early to growth-stage technology companies.
- Notable Investments: Not specified in the sources.
- Blisce
- Details: Blisce is a growth-stage equity firm and a Certified B Corp, committed to social responsibility. It focuses on investing in companies that have a positive social impact.
- Investment Focus Areas: Socially responsible investments, growth-stage companies.
- Notable Investments: Not specified in the sources.
- Community Investment Management
- Details: Community Investment Management is a debt financing provider that works with lenders offering credit to underserved communities. It aims to promote financial inclusion.
- Investment Focus Areas: Credit access for underserved communities, financial inclusion.
- Notable Investments: Not specified in the sources.
What's Next for Empower?
Empower stands at the cusp of a significant opportunity, aiming to provide fair access to credit for millions of Americans with poor credit scores. With nearly a million subscribers and plans to advance over half a billion dollars in the next year, the potential for growth is immense. The introduction of new products like Thrive, which increases credit lines with each on-time payment, further solidifies its position in the market.
Future fundraising seems promising, given the company's growth trajectory and the interest from high-profile investors. Empower's innovative approach, leveraging AI and human financial planners, positions it well for additional rounds of funding to support expansion and development. However, challenges such as competition from traditional banks and other fintech companies, as well as maintaining a low default rate, could pose hurdles. Ensuring high user engagement and navigating regulatory landscapes will be crucial for sustained success.
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