Tally, a consumer finance app that consolidates and pays down customers’ debts, raised $50 million this week to add new services. The Series C funding round, led by Andreessen Horowitz, will help the San Francisco-based company hire more engineers to help build out more products, according to Erica Dorfman, Tally’s head of finance and operations. Previous investors Kleiner Perkins, Shasta Ventures, Cowboy Ventures and Sway Ventures also participated in the round.
Three-year-old Tally, which so far has raised $92 million, is on a path to build a comprehensive personal finance toolkit for customers. It’s a platform model being pursued by other personal companies like MoneyLion, Acorns, Dave and others.
Tally launched as an automated debt manager, letting customers pay off a Tally line of credit at a lower interest rate than their credit cards. Later this summer, the company will roll out Tally Save, which includes an FDIC-insured savings account and savings-based rewards. The company also plans to add other forms of debt, including student loans and auto loans to its debt manager. “Our roadmap is around doing all of your financial jobs for you,” co-founder Jason Brown recently told Bank Innovation.
From an investor’s perspective, Tally stands out because of its ability to retain customers, Angela Strange, general partner at Andreessen Horowitz, recently said (Strange will join Tally’s board of directors). Tally’s monthly retention rate, according to Dorfman, is 99 percent. What keeps customers using Tally’s platform is the automation that removes friction and ultimately reduces the stress of consumer debt loads.
Focusing on consumer debt is a big opportunity for fintech companies and offers possibilities for future bank-fintech collaborations, according to Stephen Greer, senior analyst at Celent. “Debt is the smart side of the financial wellness equation; savings pay much less interest than outstanding loans charge,” he said. “U.S. [consumer] debt is rising so there’s a major opportunity from fintechs to offer their capabilities as white-labeled solutions to banks, a big potential growth area.”
Tally has grown its revenues by 10 times over the past year (the company wouldn’t provide a specific figure), and its team size, currently at 70 members, potentially could double over the next year as a result of the new funding.