Level Closes $1.5M To Provide Financial Services To Gig Workers
This morning Level, a Seattle-based startup that offers credit to gig-economy workers, announced that it has raised a $1.5 million pre-seed round. Level intends to provide various services to gig-economy workers, starting with a financing product.
The goal of Level today is to furnish access to credit to workers who might not be able to tap it from traditional sources, using their current income from freelance work to back the advance; akin to revenue-based financing for startups, workers can borrow a set amount, and pay back a portion of their future earnings until the debt is settled.
Level has larger plans, including offering other services like insurance products to gig workers in the future.
The startup is not big on the “gig economy” moniker, instead preferring to say that it’s helping the smallest companies grow atop various labor marketplaces, summarizing comments that Level CEO David Edelsteinmade to TechCrunch during an interview concerning the round. His company has something of a point. Level is not offering advances to Uber drivers, but instead is plugged-in with freelance groups like Dolly (on-demand moving), Porch (home improvement) and SmartHop (on-demand trucking) — services whose users may depend on non-standard equipment, like trucks and tools.
So if you are doing, say, moving jobs, and want to invest in a new truck, Level may be willing to front you a chunk of capital toward that buy. Edelstein told TechCrunch lots of folks manage to earn more after putting borrowed funds to work in their small business.
Users of Level’s service can access up to $10,000, though the CEO said that around $2,000 was the “sweet spot” for his company’s service, as that was an amount of money hard to put on consumer credit cards, but still meaningful to its customer base.
This brings us to repayment. As you’d expect, if a person did borrow money from Level and managed to generate more revenue afterwards, they might want to retire their debt more quickly than originally anticipated. What’s notable about the startup’s model is that if a user repays their advance in less than six weeks, Level will refund half the fee that was originally agreed upon.
Level is a bit like an American Heru in that, akin to its Latin American fellow-traveler, it wants to offer more and better services, including insurance, to those active at work but not in traditional, full-time roles. If they succeed, expect similar companies to crop up around the world.
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