Keith Rabois, formerly COO of payment firm Square and now working with Khosla Ventures, led a $1.5 million investment round in a US firm whose first service is designed to help the country’s low-income workers better manage their finances using a mobile app, according to Techcrunch.
The firm, which is called Even, was also backed by other investors including VC firms Homebrew, Red Swan and Slow Ventures, as well as Instagram CEO and co-founder Kevin Systrom and payments firm Venmo co-founder Andrew Kortina.
Even’s strategy is to offer low-income workers a steady income every week by setting aside a little bit of their money in a good week. It offers interest-free credit when an individual is having a bad week.
The firm, which is aiming for a commercial launch later in 2015, is setting itself up as an alternative to payday loans for the low paid.
It makes money by charging users $5 per week for the service. It is also looking to partner with enterprises.
However, the business model presupposes the low-paid earn enough in a good week to set aside income for leaner times. And that they are willing to have an outside entity have control over their finances.
Rabois left Square two years ago.