OAKLAND, CA / ACCESSWIRE / April 20, 2022 / Fintech startup Sawa Credit Inc. emerged from stealth mode to announce it has raised $3M in its series seed funding round for a community debt servicing technology platform to keep underserved borrowers from defaulting on mortgages and rent.
The capital will be used to fund additional behavioral science and machine learning-driven research and development of an online community of homeowners and renters based on their beliefs, situations, socioeconomics, and geographies. The company's novel behavioral science-driven incentives are applied to improve group members' creditworthiness and financial health.
The goal is to engage passionate, like-minded community members, so they frequently communicate and offer hope and financial help, loaning other members' money in emergencies to prevent them from defaulting on debts. It's a community lifeline to help the underserved, who often have nowhere to turn when an unforeseen emergency causes them to default or become delinquent on mortgage or rent payments - possibly leading to eviction, foreclosure, or bankruptcy. Sawa's founders compare their community platform to a "pay it forward" model for mortgages and rent.
The round, which was oversubscribed, was led by Precursor Ventures with additional funding from Allegis Capital, Commerce Ventures, Clear Heights Ventures, and Slow Ventures.
"I'm very excited about this innovative solution the Sawa team is building," says Charles Hudson, Managing Partner of Precursor Ventures. "They are deeply committed to help responsible consumers who are not well-served by the status quo, and I'm confident they'll bring much-needed solutions to them. When Sawa succeeds, they will change the financial lives of their customers and the communities in which they live."
Community - The Missing Link
Sawa's founders believe for underserved communities, the four "Cs" to access credit - Credit score, Capital, Collateral, and Capacity are missing a critical fifth "C" - Community. "Sawa, in Swahili, means ‘all good, no worries.' We are using science to increase underserved borrowers' capacity to pay their bills by building a community support network to help them in a time of need and dramatically reduce their fears about financial emergencies," says Charles Phillips, Sawa founder and CEO. "Picture a single dad who has always paid bills on time, and he suddenly gets sick, can't work, and misses payments on his rent or mortgage. Now he'll have a community to help him pay and catch up, so he doesn't default on his loans, and then when he lands on his feet, he will, in turn, pay it forward."
Many members of the Sawa leadership, board, and advisors come from Stanford University's Graduate School of Business (GSB) class of 1999. Phillips, a serial entrepreneur, and his impressive team have found their life's work helping underserved communities. They are guided by prominent Sawa board members, including Michael Pence, a Nobel Prize-winning economist and former dean of the Stanford Graduate School of Business, and David Brady, a renowned and prolific author and political economist, who served as an Associate Dean of Stanford's GSB.
The seed funding will enable Sawa to continue its research and development and to study the participant behavior on the path to finding solutions for credit access and solvency inequality.
About Sawa Credit Inc.: Sawa Credit Inc. is building a technology platform that uses behavioral science and machine learning to create a community debt servicing model. Underserved individuals will be rewarded for helping others avoid delinquency, and over time they will view Sawa's platform as a hedge against their own delinquencies and defaults. Sawa's platform keeps liquidity in the community, thus addressing wealth disparity and creating an infinitely scalable platform.
About Precursor Ventures: Precursor Ventures invests in people over product at the earliest stage of the entrepreneurial journey. Precursor Ventures is an early-stage venture capital firm focused on pre-seed investments in the San Francisco, New York, Toronto, and Los Angeles metropolitan regions. The firm focuses on investments in B2B and B2C software applications and hardware.
Media contact:
Mandy Cline
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SOURCE: Sawa Credit Inc.