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Why We Invested: Debbie
Recent data shows that 48% of Americans would not be able to pay or would have difficulty paying for an emergency expense of $400. This has contributed to 75% of adults carrying a credit card balance from month to month, and this debt burden is only being exacerbated by the proliferation of Buy Now Pay Later products, which push and allow consumers to live beyond their means.
Debt consolidation loans and other quick cash solutions can help, but over half of consumers revert to their previous level of indebtedness within a year without guidance. There are also offerings that optimize debt payoff using algorithms, but do not empower consumers to make decisions and build healthy financial habits for enduring change.
This is where Debbie comes in. Debbie is the first rewards platform for debt payoff that transitions borrowers into wealth-builders. Customers link their various financial accounts, and are then prompted to learn and take action to improve their financial health, all while being rewarded, tracking their progress, and being supported by a strong debt freedom community. Combining gamification, financial education, and community, Debbie draws on human emotions and psychology to build habits and get results.
And when customers do better, Debbie does better too. More engaged and financially literate customers are more loyal and less risky, improving retention and profitability. Additionally, high engagement and education allows Debbie to better understand its customers, unlocking a virtuous cycle of product improvements and furthering Debbie’s mission to help people go from borrowers to wealth-builders.
This mission is the primary reason we invested in Debbie, but it resonates particularly strongly because of the team behind it. The Debbie team is a group of fintech operators and investors with deep personal experience with the pain point they are solving. Frida Leibowitz, the CEO, is an immigrant from Israel who grew up in a family with financial struggles and deep credit card debt, and found herself in the same situation as a young adult. She became obsessed with debt freedom and financial wellness, which led her to start her career at Marcus by Goldman Sachs, where she spent 3 years focused on credit risk for consumer loans. Noticing the high degree of recidivism into high credit card debt after debt consolidation across the country, she set out to address the root cause of this issue and built Debbie.
When we first met Frida and her team in August of 2021, they were still building a prototype, but had conducted a tremendous customer discovery process and arrived at a value proposition that was resonating with their target audience. Although they only had a landing page and a waitlist with a few hundred people eager to try Debbie, we were convinced by the team’s level of conviction in what they were building, by their passion to help people, and by their tenacity and energy. In the 8 months since our first call, Frida has assembled a world-class team and advisory board, grown the waitlist over 20x to 12k, built and launched a Beta with a cohort of highly-engaged users, and laid the foundation to execute on an ambitious roadmap.