Company: Possible operates a platform for flexible short-term loans intended to aid individuals who are looking to build credit. The company's loans are designed to be simple and affordable, offered without a credit check, and allows for longer repayment schedules through multiple installments.
HQ Location & Year Founded: Seattle, 2017
Founder: Tony Huang founded Possible with the aim of making financial products fairer and more affordable for everyday people. Previously, Tony held several product and business development roles with Axon, a leader in connecting security devices. He has also been an elementary school teacher in the same school that he had attended as a youngster. Tony holds a degree in psychology from Harvard and has attended executive management programs at MIT and UC Berkeley.
Funds Raised and VC Investors: $156 million from Canvas Ventures, Euclidean Ventures, FJ Labs, Hustle Fund, Seattle Bank, Union Square Ventures, Unlock Venture Partners
Where did the idea for Possible originate?
My co-founders and I didn’t come from financial services or the lending business at all. We were building body cameras for cops and had spent cumulatively 26 years at Axon as part of their original software team. For the next stage in our careers, we wanted to have a big societal impact and we thought a lot about how to help low-income minority communities through technology and data. At Axon, we would go into communities where there were no bank branches. It was just payday lenders everywhere. We thought there were a lot of pain points we could help solve in financial services for low-income communities. So, without experience, we dove right in. We turned down millions of dollars in offers of VC funding to pursue other ideas, but we wanted to go after this because the mission resonated with us. So, we ended up scraping together the first money, including from our former Axon boss, who wrote the first check.
What is the key problem that Possible intends to solve?
I liked the quote cited in your first blog post from Poor Economics, which says that poverty is not about lack of money, it’s the inability to live up to one’s full potential. My family came from China. My Dad was at Tiananmen Square. Our family deeply cherishes the American ideal and, in many ways, we achieved the American dream of economic mobility for hard working people. However, we are seeing an erosion of mobility in the US, which is driving so much of the divisiveness in America today. There needs to be a better path to access financial services, capital and credit that knocks people out of buying a home, car, renting an apartment and achieving the American dream. We have customers who have been homeless and couldn’t get an apartment simply because of having no credit score. We have a goal of unlocking economic mobility for many more Americans.
How are you most differentiated as a service?
When we first started Possible, we looked at payday loans. Should they even exist? The “first principles'' answer is that credit should exist for low-income people. However, single payment products don’t help build credit history. There is an incentive mismatch between lenders and consumers. Instead of onramps, payday loans were really debt traps. We wanted to create an onramp for low-income Americans by offering small dollar loans with installment repay plans. This would allow borrowers to catch their breath and pay over multiple periods. Because it’s an installment product, we focus on long-term financial health. We took a lot of pains to get regulatory approval with federal and state lending laws to be a true credit provider to help our customers to build credit history. We didn’t want a product that would lead to nowhere. We wanted to help lay the foundation for a brighter future.
What are the company’s key accomplishments to date?
We have provided funds to around 600,000 unique individuals. We have issued 1.9 million loans to date, sometimes $50 or $100 at a time. I am proud of our team of 110 amazing individuals who work fully distributed from all parts of the US and the globe.
What lies ahead in the plans for Possible?
We just announced a no-interest credit card product. We found that some of our customers were taking Possible loans repeatedly and we believe strongly in helping them graduate out of this predicament. Possible was supposed to be an onramp. Most customers do get off, but a small percentage are constantly coming back to borrow and remain stuck in a debt cycle. We were initially working to build a marketplace of consumer-friendly financial products. We got to know the credit card space from the outside and could see the misalignment of economic incentives that led to vicious debt cycles. So we decided to build our own credit card that would not charge any interest or penalties. We will be formally launching the Possible card later this year. After having announced the card in May, we already have 300,000 people on the waitlist. We intend to expand the total addressable market and also maintain the mission and ability to serve neglected low-income customers.
Ron’s Take
Just like a number of other companies previously featured in this blog, such as SoLo Funds and Zirtue, Possible is helping low income individuals break the debt cycle and move away from reliance on usurious payday loans. Possible’s unique value proposition is that its lending product establishes that critical onramp to building real credit that will allow borrowers to enter the economic mainstream of society and obtain traditional banking products and financial services. Tony Huang is a mission-driven founder who has demonstrated his ability to scale big ideas. As Possible launches new products such as its no interest or fee credit card in the months ahead, it will be exciting to watch how many people are finally able to break the chains that hold them back from obtaining financial freedom.