After raising $50 million in a Series D round late last year, Tustin-based debt consolidator Happy Money joins Irvine micro-investing app Acorns Grow among the ranks of local fintechs reaching unicorn status.
Happy Money’s latest round of funding brings its total amount of venture capital raised to north of $135 million, according to CEO Jeff Winner.
The company’s pre-money valuation now stands at about $1.1 billion, following the investment, led by Anthemis Group and CMFG Ventures.
New Exec
There’s been a number of changes at Happy Money since its last big fundraise, a $70 million round in late 2019.
Winner is one such change: he took over the CEO role at the company last October, replacing founder Scott Saunders.
Winner joined the company in 2020 as chief technology officer, and later took on the chief operating officer role, before being named to the CEO position.
He previously served as head of engineering at Twitter, Uber and Stripe before serving as CTO for Marcus by Goldman Sachs. There, he led the development of the Apple Card, which counted 6.4 million cardholders in the U.S. in 2021.
“That’s what I bring: experience building and operating at scale in the highly regulated world of fintech,” Winner told the Business Journal. “What resonates with me is taking something complicated like finance and putting it behind a simple API, so many people can use it.”
“When we conducted the search for Happy Money’s next CEO, it was obvious to us that Jeff was the perfect choice with his blend of operational excellence and technological expertise,” said Tracy Edkins, former exec at $18 billion-valued Bay Area software firm Splunk, who joined the Happy Money board last year.
Lending Products
Happy Money, founded in 2009 by Saunders, is a technology company that connects borrowers seeking to pay off credit card debt with personal loans designed to be paid off between two and five years, while improving borrowers’ credit scores and financial literacy.
Its stated goal is improving “members’ relationships with money and transforming lives through a human-centered, science-driven approach.”
The company reports having funded $3.7 billion for its user base of over 200,000 members to date.
Instead of partnering with banks, Happy Money partners with about 13 credit unions around the country due to their ability to provide unsecured loans at lower interest rates, according to Winner.
Notable lending partners include Teachers Federal Credit Union, Alliant, Veridian Credit Union, and First Tech Federal Credit Union.
Happy Money’s Payoff platform, in combination with “great underwriting,” allows the company to provide unsecured loans between $5,000 and $40,000, with APR starting at 5.99%.
“We don’t want the consumer to be in more trouble than they were in before,” he said. “We ensure the products we offer alleviate the financial stress they’re under—not add stress to their life.”
According to Winner, the firm is forging ahead on new products that will be released over the next few quarters: about 10 other types of unsecured lending, which will allow consumers to select “the terms they’re comfortable with.”
The company doesn’t report revenue, but said 2021 was “a record-breaking year,” and said it has seen an average 42% year-over-year growth in originations from 2018 to 2021.
Moving HQ to the Cloud
Another notable change for the company of late can be seen at its Tustin headquarters.
In March 2020, Happy Money moved its headquarters from Costa Mesa to a newly built, four-story, 70,000-square-foot building at the Flight creative office campus.
Two weeks later, Happy Money’s staff was instructed to shelter-in-place amid the onset of the pandemic.
Company execs didn’t look back: they transitioned its workforce to a completely remote model moving forward.
“We didn’t even consider a hybrid model as an option, as it can put remote and in-office talent on unequal footing and limit flexibility and diversity of thought,” Happy Money Chief People Officer Lisa Hennessey said in a statement last year.
Winner is leading the company from his home in Boulder, Colo.
“Distributed access is best because this way, we can access the most diverse talent across the U.S. and Canada,” he said, adding that Happy Money’s full-time, remote staff has grown to 400 to date.
Today, the company subleases a “good portion” of the Tustin space to one firm, officials said. Real estate records indicate that space tourism firm Virgin Galactic Holdings Inc. (NYSE: SPCE), which has its executive offices and other division in the city, is that company.
Happy Money still uses some of its Tustin base for mailing services.
Banking’s API Future
Happy Money’s focus is on developing new lending products, and down the line, the company’s focus will shift to “rapidly” deploying APIs to all banking services, Winner said.
APIs, short for application programming interface, are tools that allow applications to talk to each other. They automate everyday tasks, like accepting payments made through online business and e-commerce sites.
“I’ve worked on APIs for a long time,” he said. “The key to an API is simple and easy to use. You don’t have to go through minimums and contracts in the modern world.”
Happy Money’s API is slated to soft launch with its partners by the second quarter, before broadly launching later in the year.
“We hope to help communities that might have trouble in a rapidly evolving technology world, to continue to thrive and succeed in the future.”Â
