StellarFi Emerges From Stealth to Help Consumers Build Credit
Sure, the latest initiatives from the Teslas, Apples and Googles of the industry tend to dominate the tech news space — and with good reason. Still, the big guns aren’t the only ones bringing innovation to the sector.
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Austin-based fintech startup StellarFi emerged from stealth in November after operating in beta since its launch in 2021. In just one year, the company has already hit significant milestones to cement its success, including raising $7.2 million in seed funding and hitting $1 million in average annual revenue.
StellarFi is a credit-building platform that uses recurring monthly payments to help improve a user’s credit score. It does so by reporting recurring payments, such as Netflix subscriptions or monthly gym memberships, to major credit bureaus on behalf of a user.
Lamine Zarrad, CEO and founder of StellarFi, said he wants his startup to help underserved communities — including LGBTQ or BIPOC individuals, people with disabilities and low-income households — build up their credit scores. Higher credit scores indicate to businesses that a borrower is more likely to make timely payments. People with low credit scores often pay higher interest rates on credit cards and have a harder time qualifying for loans.
StellarFi is an ideal product to help members assess and improve their financial well-being by building their credit and consolidating all their bills in one place.”
Zarrad, a refugee and former U.S. Marine Corps, said he chose to focus StellarFi on helping marginalized groups because he has been in their shoes.
“I wasn’t confident in how to navigate the financial landscape successfully with the limited resources I was given,” he said. “Inclusion has always been top of mind for me. The BIPOC community is at a disadvantage when it comes to financial wellness and credit building.”
Prior to launching StellarFi, Zarrad founded Joust, another fintech startup that provided business banking services for self-employed individuals. Joust was later acquired by ZenBusiness, where Zarrad worked as its head of product until the launch of StellarFi.
Having raised capital a few months back, StellarFi is still looking to put its new funding to use. The company plans to continue growing and will launch hiring initiatives in 2023.
As for how the company has managed to rapidly grow since its launch, Zarrad told Built In it is a result of several aspects. Product market fit is the biggest factor contributing to the company’s success. Inflation is at a record high and more people are taking an interest in their credit score and want to take steps to improve it, Zarrad said.
“Interest rates and the cost of credit are top of mind as consumers are assessing their financial profiles after 15 years of [a] bull market. StellarFi is an ideal product to help members assess and improve their financial well-being by building their credit and consolidating all their bills in one place,” Zarrad said.
Going forward, StellarFi plans to make key additions to its product. According to Zarrad, the company will soon add gamified rewards for customers. By adding gamification to the rewards system, the startup is hoping it will further incentivize users to engage with the platform and earn rewards. StellarFi is also looking to add flexible payment options to its platform.