Debbie, a New York fintech agency, has closed a $5.3 million USD seed spherical and launched Rewards 2.0, a money rewards platform structured round constructing financial savings and lowering debt relatively than incentivizing client spending.
The spherical was led by Trustage Ventures and Reseda Group, with participation from One Manner Ventures and Zeal Capital Companions – bringing Debbie’s whole funding to roughly $8 million USD.
The product
Rewards 2.0 positions itself as a structural counter to the traditional bank card factors mannequin. Customers warn one Debbie level per greenback deposited into financial savings or utilized towards a bank card steadiness, with these factors redeemable immediately for money.
Eligible accomplice financial institution and credit score union accounts unlock 1.5x to 2x level multipliers. Further factors can be found for finishing in-app monetary literacy modules and assembly month-to-month financial savings targets.
Debbie intends to broaden redemption choices to incorporate reward playing cards, unique occasions, and transfers to main retailers. Past this, the corporate’s 11 financial institution and credit score union partnerships are designed to be commercially self-sustaining: customers who enhance their monetary well being deposit extra, giving accomplice establishments a transparent incentive to help the mannequin.
The founders
Debbie was based by Frida Leibowitz and Rachel Lauren, school roommates who developed the platform’s first iteration whereas working to resolve Leibowitz’s $15,000 USD private bank card debt.
Each founders grew up in immigrant households with firsthand expertise of monetary precarity, a background that has knowledgeable each the product’s design and the corporate’s acknowledged mission.
Leibowitz, serving as CEO, frames the issue by way of incentive structure relatively than monetary literacy. The difficulty, in her view, isn’t that buyers lack instruments however that the prevailing system actively rewards habits – spending – that works in opposition to wealth-building for almost all of customers.
The context lends weight to that argument. People now collectively carry $1.277 trillion in bank card debt, the best whole on document, with almost half of all cardholders carrying a steadiness from month to month.
Traction and market positioning
Debbie has grown to over 200,000 customers who’ve earned greater than $2.3 million USD in money rewards and saved a collective $149 million USD towards monetary objectives – metrics the corporate says are indicators of substantive behavioral change.
The startup additionally frames its providing in opposition to the $15 billion USD annual switch that economists attribute to the bank card rewards ecosystem – wealth that flows, by means of the interchange charge construction, from lower-income shoppers towards wealthier ones.
Its aggressive positioning extends past legacy banks to incorporate newer fintechs which have, up to now, largely preserved the spend-to-earn incentive mannequin relatively than difficult it.
Featured picture: Courtesy of Debbie
Disclosure: This text mentions shoppers of an Espacio portfolio firm.
