“There’s no way to sugarcoat today’s weak jobs report,” Robert Frick, an economist at Navy Federal Credit Union, told CNBC(1) when the Bureau of Labor Statistics released its November jobs report. The rate of job growth is decelerating, and the country is still 10 million jobs short of its pre-COVID levels—a bigger downturn than even the Great Recession of 2007-08.
The pandemic has weakened the foundations of a working class that was already wobbly before the virus struck. Despite the all-time highs of the stock market over the last decade, inequality has been rising, and, according to a national survey by Career Builder(2), 78 percent of American workers live paycheck to paycheck.
Special Ed teacher Dominique Phillips is one of them. A New Yorker, born and raised, Phillips is a mom who used to struggle with her finances. She frequently had to make tough compromises — like choosing between food on the table or proper medical care.
It’s people like Phillips we had in mind when we launched Brigit, a holistic financial app, in January 2019. Since we launched, our members have saved over $250 million in fees in aggregate, i.e. saving a member an average of over $500 each year.
One of our core features, Insights, tackles a problem that a majority of Americans face: financial literacy. Two-thirds of American adults cannot pass a basic financial literacy test, according to a survey by the FINRA Investor Education Foundation. Their 2018 financial capability survey found that financial literacy has declined in the past decade, and that nearly half of Americans did not have enough rainy day funds to cover three months of expenses.
So we designed the app’s “Insights” feature to provide alerts, financial literacy tools, and personalized savings insights. It helps Brigit members with financial literacy, a crucial first step to financial wellbeing.
Phillips credits Brigit’s budgeting tools with helping her get a handle on her finances.
“I love the part that predicts if I’m going to go into the negative. It gives me a clear picture of things I need to work on, things I need to change,” Phillips said.
By getting insights into how exactly she’s been spending, she has been able to cut back, and “think about what’s important.” She has even been able to save for those unexpected costs in the future. “Brigit definitely helps me save money,” she said, “which is amazing .”
She is one of the more than 90 percent of our members who say they have experienced a “significant” reduction of stress since joining Brigit.
Our co-founders Zuben Mathews and Hamel Kothari have both had some personal experience with financial stress—it’s what drove them to create this company.
Kothari grew up in a low-income household in Lowell, Mass., and had a front-row seat to financial insecurity with several members of his family living paycheck to paycheck.
“I co-founded Brigit because I couldn’t bear to work on anything else,” Kothari said. “I know just how deeply financial stress can affect people’s lives — I’ve watched people I love struggle with it. Now I spend every day building a more financially inclusive world.”
As an immigrant from Delhi, India who came to Chicago for college, Mathews had no credit score, and so did not have a credit card. As a student, he struggled with the timing mismatch of needing to pay bills and receiving a paycheck from his side jobs photographing food for a grocery website and conducting phone surveys.
“You earn money today, but then you have to wait for the paycheck—it’s a timing mismatch that causes a huge amount of stress,” Mathews explained. “Let’s just say I ate many many Snickers bars as meals and paid a fortune in overdrafts fees in my first two years of college.”
That memory is never far from his mind when he thinks about Brigit’s members—and the 88 million Americans who have poor or no credit, like he did. It’s what led to Brigit’s “Instant Cash” feature as a safe, reliable way for members to bridge that timing mismatch and access emergency cash to stay afloat.
When the pandemic hit, Mathews and Kothari knew that our members needed even more help, so the team got to work on adding more features to the app. One of the biggest monthly bills for Brigit’s members, after rent, is the cell phone bill. We knew that cell phone companies will sometimes work with you during times of hardship— if you are persuasive enough on the call with a customer service representative. So we made it easier for our members by creating a personalized message in the app that included a script for those conversations and even a one touch dial to their specific cell phone provider.
Another new feature introduced in response to the pandemic is the identity theft protection, offered to every Brigit member who opts into it. It stemmed from a story Mathews was reading about the rising rates of identity theft during the pandemic; it’s common for cases of fraud, scams and identity theft to spike after outbreaks of disease or natural disasters. That was something we could help with, he thought. Now, Brigit members who choose it are covered to the tune of $1 million if they are the victim of identity theft.
Finally, we have also made it easier for its members to find side hustles through its “Earn Extra” feature, which connects them to various companies looking for workers, such as Uber, Instacart, and Survey Junkie, among others.
“I’m glad Brigit is able to help,” cofounder Kothari said. “Every bit counts.”
What’s more, he explained, Brigit’s incentives are aligned with our members’. Unlike other businesses whose bottom line is tied to the amount that their customers borrow from them, or how many times, Brigit charges a flat monthly fee of $10 per month. As our members learn how to budget better, save more, and borrow less, it costs less for us to serve that member.
It’s simple, said Corey Stone, former assistant director at the Consumer Financial Protection Bureau, and Brigit advisor. Brigit’s goal is the same as that of its members: to make meaningful progress towards financial health.
“Brigit benefits when its members are able to better manage their cash-flow and use advances with less frequency,” said Stone.
In other words, as our members’ financial health improves, so does Brigit’s.
In addition to Stone, Brigit’s advisors include other eminent financial experts and consumer finance advocates such as Adrienne Harris, a board member of the Financial Health Network and former special assistant at the National Economic Council in the Obama White House and Bobby Mehta, former CEO of TransUnion, and current board member of TransUnion and Allstate.
Our financial supporters include our new Board member Jeremy Liew from Lightspeed Venture Partners, which has led Brigit’s $35 million Series A round of funding, with participation from DCM (Brigit’s lead seed investor), Nyca, Canaan, DN Capital, CRV, Core, Shasta, Hummingbird, Abstract, Brooklyn Bridge, Secocha, Ashton Kutcher’s Sound Ventures, and Flourish.
A number of founders have supported the company as well, including Kevin Hartz (co-founder of Eventbrite and Xoom), Ori Allon (co-founder of Compass) and Henry Ritchotte (former board member of Deutsche Bank).
“We thank our partners, supporters, and most of all, our members for believing in what Brigit is doing. This is only the beginning, we will continue to work tirelessly with our great team to eliminate financial stress everywhere we can,” said Mathews.
– The Brigit Team