Altro has raised $18 million to help you get a loan just by paying for a Netflix subscription.

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Michael Broughton was the first in his family to go to college. But he almost didn’t when he had trouble securing the necessary funding to pay for his tuition.

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The experience stuck with him, and when he met Ayush Jain at USC, they were drawn together by their belief that credit should be free. They came up with the idea of ​​helping people get credit through recurring forms of payment such as digital subscriptions to Netflix, Spotify and Hulu.

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In December 2019 they started Altro — which started out as Perch Credit — and, along with a few others, began lurking at Hacker House to build a platform that finds a person’s recurring transactions and links them to a trading line that it reports to all three credit bureaus. For those unfamiliar, a trade string is a data string that goes directly into the bureau’s system and affects a person’s FICO score, which is used for underwriting.

“What we have built not an alternative or addition,” Broughton said. “We don’t create our own score, but rather it’s a direct correlation to your actual score, improving over time, which the user can see in our app.”

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Participating services include, but are not limited to, YouTube Premium, Dollar Shave Club, Adobe Creative Cloud, Nintendo Online, Apple Music, SoundCloud, Xbox Live, Amazon Prime, HBO Max, and DisneyPlus.

“Users will pay anyway, but the percentage goes to us, not the companies,” Broughton told TechCrunch. “We don’t want to charge users for access to what they already have.”

Image credits: Altro

The company competed in pitch competition after pitch competition, raising about $100,000 in total, until Jay-Z musician analyst Marcy Ventures was in the audience one day in the summer of 2020.

The firm wrote the company a check for $250,000 the next day, starting a seed round and prompting Broughton to drop out of college to focus on developing Altro.

“It was a 48-hour turnaround and it was the first money we’ve ever raised outside of pitching contests,” he told TechCrunch.

By the time the company raised its $2.5 million seed round in December 2020, which included Citigroup and the SoftBank Opportunity Fund among others, Altro had several thousand customers. By 2021, the app went viral after Jay-Z’s Marcy Ventures blogged about it.

“We had over 200,000 downloads and were in the top 10 on the App Store,” recalls Broughton. “Thousands of videos have been made about how Jay-Z is changing the way people think about loans. I had to make a waiting list.”

Image credits: Altro

The company, overwhelmed as it is, told people on the waiting list that if they need immediate access to credit, let them know. Over 3,000 responses were received in 24 hours, with people sharing very honest stories about being stuck in abusive families and needing praise to get out.

Altro continued to participate in Y Combinator Summer Party 2020.

And today, the startup is announcing an $18 million Series A funding round led by Pendulum featuring Marcy Ventures as well as Citi Ventures, Black Capital Fund, Concrete Rose Fund and individual investors such as Dick Parsons and Deborah Quazzo, among others.

Altro plans to use its new capital to further expand its credit and financial literacy program, as well as expand its team. For example, Altro focuses on user education with a catalog of over 350 educational audio clips covering topics such as cryptocurrencies, investing and trading. Watching snippets not only allows users to become more financially savvy, the company says, it also positively impacts user ratings the more they participate.

“Most of our marketing is already earned, we haven’t invested a dollar in it yet,” Broughton said. “But now we need to build a marketing team so we can help more people on a per-user basis and expand the brand.”

It also plans to soon allow people to get loans through timely rent payments, an offer that was available on its platform previously and will be brought back in the coming months.

It was important to Broughton and Jane that they the app was completely free to users as they viewed services that charged users to access credits as extortionate. In this way, Altro monetizes the exchange, or rather, the actions performed at the expense of spending. The company’s subscription partners pay Altro a fixed percentage of what users pay them directly. In a nutshell, Altro has developed relationships with Visa and Mastercard, which give the startup a percentage of transactions made with these providers.

Joanna Rees, current FICO board member and venture studio partner Westjoined Altro’s board of directors as part of the new funding and is an investor in the company.

Rhys told TechCrunch that she was inspired by Broughton.

His life experience and the purpose of starting the company came from a personally realized need and authenticity,” she said. “I also understand the immediate opportunity to further expand the lending market through my role on the FICO Board of Directors.”

She went on to say that, as the name suggests — Altro means “other” in Italian — the startup can count other payments people make to demonstrate creditworthiness, which she and other FICO employees believe is unique to the market.

“Subscription data in particular is a big opportunity,” Reece told TechCrunch. “Altro combines this with accessible educational content that will enable ‘others’ to participate in credit markets and receive benefits that improve their quality of life.

Pendulum managing partner Rish Sinha also said Broughton’s story “really resonated” with his firm.

The fact that the foreign-raised soldier could not access credit spoke to a deeply flawed system, and his determination to solve the problem he himself faced was irresistible,” he told TechCrunch. “There are 45 million low-income Americans in the United States, many of whom are people of color. Lack of access to credit fundamentally prevents them from improving the livelihoods of their families. Platforms like Altro can bring about change that will improve people’s lives and also help this country achieve greater economic potential.”

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