Trim

Overview

Trim is a fintech startup that offers an AI personal assistant that improves the financial health of its users. Services include saving automation, spending analysis and automatic budgeting. Its hottest offering is an automated service that negotiates and lowers a user’s bills. Trim does this with subscriptions such as Comcast cable by using AI to look at billing and pricing trends regionally. It’s customers tend to be younger and more tech savvy individuals, mostly in the millennial demographic. Their next set of offerings will be focused on helping solve debt challenges people have, especially around student loans and credit card debt.

Trim has an interesting business model that takes a percentage of what they save their users by negotiating their cable and internet bills.

The team is currently less than 20 people and is based in San Francisco, CA.

Why I like Them

Automation - the team is hyper focused on automating the personal finances of its users. A long term thesis of mine is the growth of more automatic personal finance since the vast majority of people don’t understand and hate dealing with their finances. Trim recognizes this and is investing heavily in R&D to ultimately become a platform that improves user’s financial health.

The team is also laser focused on their users’ needs and their mission of solving people’s financial problems. In finance and fintech in general to often firm’s are offering a service, but not helping the end user actually improve their financial well being. Trim talks to their user’s weekly to target the next products to build that directly helps them solve an issue they need. As expected with this focus, they have strong traction and growth. Even more interesting, they find that their service is very sticky as they deliver a newsfeed of transactions and information via SMS to their users that is very engaging, so much so that most users stop using their banks app.

Disclosure:  I have spoken to members of the team.

Trucker Path

Overview

Trucker Path is a software company building out a suite of offerings for the trucking industry.  It offers three product lines targeting long haul truckers.  Its initial product was a navigational and trip planning app called Trucker Path.  More recently it added a freight hauling marketplace platform called Truckloads, and InstaPay which is a factoring service.  The company monetizes via a premium version of the app along with its factoring services offered via its Truckloads platform.

The company is based in Mountain View, California and has ~60 employees.  Its founder is Ivan Tsybaev, a serial entrepreneur.

Why I like Them

Although I don't usually like app companies, Trucker Path caught my attention because what started as a basic navigation app for truckers has been able to transform itself into a full platform and freight logistics marketplace for goods shipped via truck. Trucking is a slow moving, fragmented industry and the team was clever to get their app and brand known by first offering targeted navigation features to the professional long haul trucker customer.  By all reports truckers are delighted by the app with an average of 4.7 out of 5 stars and 35,000 user reviews.  Trucker Path leveraged this satisfied user base to solve the chicken and egg problem in building a freight marketplace. 

This smart progression in product offerings has rewarded the team with extremely strong traction as they have 600,000 truckers using the navigation app.  Their freight marketplace Truckloads, has over 100,000 carriers searching through over 3 million monthly loads posted by 800+ freight companies.  The biggest opportunity lies with their freight marketplace and factoring business since trucking in the US alone is a $700B+ industry.  There is an open field here to automate the currently inefficient trucking marketplace as can be seen by the recent news that competitor Convoy has recently raised a large sum of money.

Technology like Trucker Path's offering serves as an intermediary step between human based trucking and fully autonomous self driving trucks.  Most importantly they have data that is invaluable to an autonomous trucking fleet operator.  As their head of marketing, Sam Bokher, describes it - "We have the most comprehensive data on trucking-related points of interest, truck parking data – this data have been crowdsourced from our users, so no one else in the industry has such information. In addition to that we have information about where the freight is going and what the current rates are."  It is easy to see how their products could plug right into the technology stack of companies building fully autonomous trucks (Uber, Tesla, etc.).

I also had a chance to ask the team about their thoughts on fully autonomous trucking.  They don't see it being real for at least another 10 years and see the regulatory framework as not even close to where it would need to be to support fully autonomous trucking networks.

Trucker Path has strong prospects with the growth opportunity of their trucking freight marketplace business along with the value of their proprietary mapping and trucking related data trove.

Disclosure:  I have spoken to members of the executive team.

Navigation App

Emerging Trends: Commercial Banking Finally Wakes up and Realizes It is Being Disrupted

The New York Times recently had an interesting piece about the upcoming public launch of Zelle.  Zelle is a mobile peer to peer payment network technology that competes against Square Cash, Paypal, Apple Pay, and the popular Venmo app.  Basically you use your mobile device to send money to anyone given their email or phone number - no need to dig for change or have cash handy.

The technology here isn't revolutionary and has been around for a number of years - what I find interesting is that it took the established industry of retail banking 6+ years to role out a product like this.  Despite being owned by every big US bank (JP Morgan, Wells Fargo, Bank of America, etc.) it experienced a ton of delays and missed deadlines.  The industry has realized (potentially to late) that Fintech companies are rapidly gaining traction with younger consumers who prefer their offerings.  This is a textbook example of a incumbent industry fighting upstarts but being a bit behind the curve.  

However, Zelle is taking the right approach in my mind and leveraging its backers by not initially offering a stand alone app like its competitors but seamlessly embedding itself in the mobile banking apps of its backers using a standard consumer facing interface.  No need to start at a 0 install base when millions already use the banks' existing apps.  Zelle is also taking the next step ahead of its competitors of having money transfers be instantaneous with no delays for clearance.

Technologies like these are especially interesting to me as in places like Germany where credit is rarely used or trusted, or in emerging market countries where credit cards just aren't as widespread or available but everyone has a mobile device.  My prediction is that Zelle will turn out to be a great way to get less tech savvy and older generations using instantaneous mobile payments but that the damage has already been done with younger consumers already having entrenched loyalty to their platform of choice (i.e. Venmo, Apple Pay, etc.).

Tala

Overview

Tala is a fintech startup using mobile devices in emerging market countries to generate credit scores and grant micro-financing to those who don't have traditional access to banks.  They use more than 10,000 data points (not a typo) from a user's mobile phone behavior to generate credit scores in emerging markets.  With this credit score users are able to get instant short term loans in 5 minutes underwritten by Tala, all from their mobile device.  The company then tracks customer repayment over time and can offer better interest rates and more generous loans to users that show good financial behavior.  They report they are highly profitable.

Tala launched initially in Kenya with its HQ in Santa Monica, California.  Its product offering is available in Africa, Southeast Asia, and India at this time.

Why I like Them

This is the most innovative product I've seen in FinTech in a very long time (enough to get me over my instinctive app company skepticism).  The algorithmic ability to instantly generate a credit score from someone's mobile phone data is light years ahead of the standard FICO score model and a brilliant idea all on its own.  By all reports their credit models are far more indicative of someone's financial behavior than traditional FICO score models which are not nuanced enough and uses few data points.  It makes sense since in today's world nothing knows you as well as the mobile device that you engage with constantly.  The obvious question is why traditional banks aren't doing more here as it would help them control their risk pools much better.

Beyond there is a huge untapped market here.  There are an estimated 2 billion people on the planet that do not have a credit score or any sort of financial identity but would leap at the chance for micro loans.  Tala is brilliant to offer this product in emerging markets only for now - they know exactly who and where their customers are.  More than 90% of first time customers fully repay loans with 95% coming back for additional loans after they repay the first.  It is easy to see how this creative approach could become dominant even in the developed world since it gives a much more nuanced and detailed financial profile of a potential borrower.  

Disclosure:  All information is from publicly available sources, I have not had any contact with a member of the company or its investors.