Lendtable — a Black-led fintech startup — has raised an $18 million Series A funding round led by O1 Advisors with other participants including SoftBank’s SB Opportunity Fund, Valor Equity Partners, and the CEOs of Complex Networks and Social Finance, Inc (SoFi), Socii Capital and Streamlined Ventures.
Founded in 2020 by former Dropbox product managers Mitchell Jones and Sheridan Clayborne, Lendtable offers cash advances to allow employees to take full advantage of their 401(k) match all at once without needing to use any of their own money. Once their money has been vested, the San Francisco-based startup takes a portion of the profit earned.
Jones and Clayborne were inspired to solve the problem of underutilized 401(k) matching by their own families’ financial struggles.
“I’m obsessed with trying to help people save and invest their money. I come from a lower-middle-income Black community in Dayton, Ohio,” Jones told AfroTech.
While an undergraduate at Yale Unversity, Jones completed an internship at Goldman Sachs. This is where, according to him, he learned the difference between saving and investing. He took this new knowledge back home and attempted to help his parents manage their finances better.
“I really, really tried to figure out how they were saving and investing their money. And I insisted that they show me kind of what they were saving in. And all their money was in checking accounts,” Jones explained to AfroTech. “This was more than 10 years ago now. And it just lit a fire under me. I was like, my parents are not going to be able to retire even though they’ve been saving for 20 years and have been working really hard. And I thought that was broken.”
Sheridan’s journey to the startup world was also born out of necessity. After being accepted to Northwestern University at just 15-years-old, his family fell into dire financial straits. He then decided to find a way to make money.
“I ended up starting this hedge fund that bought and sold sneakers, tickets and apparel. By the time I was 18, we scaled it up to $25 million in revenue,” Clayborne explained to AfroTech.
According to Clayborne, by 17-years-old, he had made his first one million dollars, but didn’t know what to do next.
“From there when I was 17, I was a quant trader at JPMorgan. When I was 18, I was the youngest person to work on the Goldman Sachs Special Situations Group. And I just got to see all these different things and private equity and venture capital and how all these billionaires were making like 30, 40, 50 percent year over year returns,” Clayborne said. “But it was a really eye-opening experience because no one I’ve ever known had actually taken advantage of any of those assets. All these billionaires were able to do all this financial maneuvering, averaging, to make all these outsized returns, but regular people never actually had access to those asset classes.”
With Lendtable, Clayborne and Jones hope to help regular people make smarter long-term financial decisions even while juggling everyday expenses like bills, student loans and providing for their families.
According to the press release, Lendtable has already disbursed $2.4 million in match benefits to employees at a wide range of companies from small consumer brand companies to powerhouses like Google, Microsoft and Amazon. The press release also indicated that, in early 2021, Lendtable partnered with Kitu Life Inc., the maker of keto protein brand Super Coffee, to help all of their employees max out their 401(k) contributions.
“Within as little as two weeks, Lendtable decreased the amount of Super Coffee employees not using their full 401(k) benefits by 15%,” the press release stated.
Now, the founders are looking to expand their reach and help more low-income families maximize their financial potential through growing their team, increasing their marketing campaigns and expanding their product offerings.
“We’re looking to triple the team size. We think that’s really important, adding even more people in customer success and marketing and product and engineering, and design and data, and finance,” Jones said. “There’s a lot of both horizontal and vertical products that we want to start offering that we think can help make Lendtable an even better experience. In addition to 401k matches and ESPPs, there are HSA matches, there’s very soon to come student loan matching, there are unused PTO, there are many benefits horizontally. But even vertically, there’s a lot more value, we can add to the 401k experience.”
This latest funding brings Lendtable’s total amount raised to $24 million.
Editorial note: This interview has been edited and condensed for clarity.