Track apps

Fintech startup helps families track food stamps and other government benefits, raises $50m in Series B funding round led by Nyca Partners

There’s no shortage of fintech startups tackling business loans, mortgages, and student and consumer debt, but Brooklyn-based Propel focuses on financial services for low-income families and just raised $50 million to keep growing.

Propel is developing financial technology for this often overlooked group through Providers, a mobile app that allows users to track their food stamps, government benefits and cash balances without having to call a 1-800 number or visit a government website. Currently, a quarter of the more than 20 million U.S. households receiving SNAP benefits use the app to keep tabs on their finances, with more than $30 billion in food stamps handled annually by providers.

Propel began when CEO and Founder Jimmy Chen left a job as a product manager at Facebook in 2014 to launch his own startup on a Blue Ridge Labs scholarship later that year, with a vision to bring dignity and ease. to the reception and use experience. benefits, in particular food stamps. The mission is personal for Chen who remembers what it was like growing up in a household struggling with food insecurity.

“Tech people solve problems they understand,” Chen says. “There is a stigma attached to the term ‘food stamps’ all over the country. I think one of the reasons is that it makes you feel different. You pay with a different thing that doesn’t have the respect you would get paying with a shiny credit card.

Propel raised $50 million in a Series B funding round led by Nyca Partners, joined by other investors including JPMorgan Chase, Salesforce Ventures and Andreessen Horowitz. The capital injection from this round brings the startup’s total funding to $80 million since its Series A in 2018.

Since the app is free to users, Propel’s business model relies heavily on third-party companies paying for in-app space to promote offers such as insurance coupons, affordable utilities , grocery store discounts, health care programs and job offers. Over 50 different companies pay Propel to promote their content. Two of its biggest customers are Assurance Wireless (which provides smartphones and free phone plans) and Comcast’s Internet Essentials (which promotes discounted home broadband).

“If you look at financial services for the poor, in many cases they are scams,” says Hans Morris, managing partner at Nyca Partners. “Propel shows that it doesn’t have to be like that, but you have to be very good at avoiding people who are going to use the card fraudulently, at managing all your costs, but also at creating very good experiences. And it takes really good software to do that.

Propel’s newest product is the Providers Card, a free debit card run on the Providers app specifically designed to maximize government benefits, including disability benefits and child tax credits, by allowing users knowing when to expect their next deposit to arrive and waiving overdraft fees and minimum account balance requirements. The bulk of the Series B funding will go towards the development and expansion of this debit card service, which provides another revenue stream for the startup through interchange fees.

“We strive to create a unique type of business that is centered on a social mission, but does not offer inferior financial returns,” Chen says. “I think this is the most sustainable way to build something that will create deep and lasting social impact with a strong business model that allows us to continue to do so at scale..”

While Propel is unique in its business model, there are other apps that help SNAP recipients check their balances, such as ebtEDGE, a product developed by financial services giant FIS.