Stilt, a Y Combinator alum that provides financial services for immigrants without Social Security numbers or credit reports, announced today that it has closed a $7.5 million seed round. It also launched FDIC-insured pre-approved global bank accounts today.
The startup has raised equity from investors including Liron Petrushka; Hillsven Capital; Streamlined Ventures; Gokul Rajaram; Bragiel Brothers; Fundbox CEO Eyal Shinar; Next Insurance CEO Guy Goldstein; Charles Choi of SK Networks; and Y Combinator partners Dalton Caldwell and Kevin Hale.
It also raised about $100 million in debt capital, or money to be used for lending, from Smart Lenders Asset Management, FourthGreen Capital and others.
The startup, which launched out of Y Combinator’s winter 2016 batch, was founded by CEO Rohit Mittal, who previously worked as a data scientist at PopSugar, and Priyank Singh, a software developer who worked at Amazon subsidiary A9 and Microsoft.
Both experienced firsthand the challenges of renting apartments and securing student loans and other financial services as immigrants to the United States, and wanted to create a service that would help others in the same position.
Stilt’s first product was loans, and, over the past four years, Mittal said it has lent tens of millions of dollars.
"There are very few services in the U.S. that allow non-U.S. citizens to open accounts without a Social Security number, so our focus is not only giving them the best cross-border digital banking service, but one that is also very tightly integrated into a credit platform. Anyone opening a bank account with us is eligible for a whole bunch of credit products," Mittal told TechCrunch.
The company uses proprietary technology that scores applicants without credit reports by analyzing a wide range of financial and non-financial data to create risk models. This includes data sets from universities, half a million employers and millions of job positions, plus data from credit bureaus and banks, in addition to the type of visa an applicant has (for example, an applicant on a student visa would be scored differently than someone on a H-1B visa), and their financial history. Further loans are underwritten based on the performance of the user’s first loan from Stilt.
The interest rate for Stilt’s loans is generally about 13.5% to 14%, offering applicants a better alternative to traditional lenders or payday loans.
"We’re a mission-driven company, so we won’t do business where we are charging anyone a 100% interest rate. Consumers should be able to get the best option and we try to improve our credit risk model to give the best rate possible, even if they don’t have the traditional credit criteria that other banks look for," said Mittal.
Stilt currently focuses on personal financial services, but plans to add products for small businesses in the future. Over the past few months, Mittal says the company has seen an increase in applications because of the COVID-19 pandemic, but he adds that loan performance has remained steady.