Promise’s flexible payment platform for government debt is growing rapidly, raising $25M to keep growing – TechCrunch

Paying bills is never easy, but the last few years of hardship have made it even harder. To promise works with utilities and government agencies to provide payment flexibility for people who cannot cover their entire water or electricity bill at once. The company has seen huge growth in 2021 and just raised a $25MB round to keep accelerating.

Promise works with government agencies and related organizations that collect everything from utility bills to license fees. Usually the payment processes for these are very rigid and do not take into account fluctuations in income or cash on hand; Promise provides a plug-and-play interest-free installment payment plan for something like an electric bill.

“For people who have money, we want systems that are as flexible as possible, but for the poor, that’s not how it works. If you don’t pay by the 5th, you don’t get the service and you suffer the consequences,” said Phaedra Ellis-Lamkins, CEO and Founder of Promise. For example, if you don’t pay your commercial driver’s license fee on time and you don’t get the license, then you can’t work to get the money to pay for the license, or your gas bill , so you have late fees, and soon. At a time of enormous fiscal uncertainty, such rigidity doesn’t really make sense.

Ellis-Lamkins explained that the old systems are based on the idea that if someone doesn’t pay it’s because they don’t want to, and they are punished with fees and interest, or forced to go to a predatory service like a payday. loan holding. The promise takes a different position.

“Our thesis is that structurally, they can’t pay — it’s not a choice,” she said. “If you build a system that works better for people, they will pay.”

This idea seems to be supported by the data: places where a majority of people were living with rolling public debt were suddenly paying it off at rates above 90%. “The science of what we’re doing is getting better and better,” she added. And governments have recognized that it makes sense to subscribe to a service that makes it much more likely that revenue will actually come in.

We spoke with Promise almost exactly a year ago when he raised $15 million to expand his operations, and he did. The year saw the company’s revenue and customers (i.e. utilities, not bill payers) grow 32x and 45x respectively. And he said that just in the first weeks of 2021 he had already booked multiples of those multiple.

I asked what that growth looked like. “It’s like adding child support, it’s like adding parking tickets — we have a pretty diverse set of clients,” she said. “We just don’t want people to face the negative consequences of public debt, and we don’t want people to pay interest on it. We got good at getting money in, but we also wanted to get really good at getting money out.

As she explained, Promise’s direct interface with someone like a utility gives them insight into things like government grants or stimulus checks. For many, getting cash or a rebate that has been officially awarded to them means filling out paper forms, providing tax records and visiting a location in person – not exactly practical, even outside of pandemic conditions. . Government agencies know which people are eligible but do not proactively alert them – so Promise does this on their behalf.

Picture credits: To promise

To be clear, this is money that local and state governments want to donate – budget items or federal money that could be lost if not allocated. But like any bureaucracy, neither speed nor communication is their strong point. In a Louisville case study, Promise gave more or less 10 times what local authorities had more or less by texting eligible people and saying “come get it.”

A pleasant consequence of Promise’s work is that it puts pressure on the predatory loan and collection agencies that lived on those who were struggling to get by. Few people will be sad to see these disreputable business models reduced to desperate circumstances, like the people they target.

As it becomes clearer that you catch more flies (and bills) with honey, more and more local governments are signing up and paying the subscription fees that provide revenue to Promise; users are not charged. The $25 million in funding will cover the hiring needed to handle all of these new clients and, though Ellis-Lamkins declined to go into specifics, will expand the business to payment work for the federal government. It’s a big fish to land, and we can probably expect Promise to continue to grow.

This B round was led by The General Partnership, with participation from Kapor Capital, XYZ Ventures, Bronze Investments, First Round Capital, Y Combinator, Howard Schultz and others.

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