Rightfoot moves forward with $5m seed

Rightfoot, a provider of simple debt repayment APIs, has secured $5 million in seed financing.

Rightfoot, a provider of simple debt repayment APIs, has secured $5 million in seed financing. Bain Capital Ventures led the round with participation from other investors that included BoxGroup and SemperVirens Venture Capital.

PRESS RELEASE

San Francisco — February 3, 2021 — Rightfoot, provider of simple debt repayment APIs, today announced a $5 million seed financing round led by Bain Capital Ventures, with participation from BoxGroup and SemperVirens Venture Capital. A select group of distinguished operators also joined the round: William Hockey (Co-Founder of Plaid), Annie Hockey (Co-Founder of stealth startup), Omri Dahan (CRO of Marqeta), Julia and Kevin Hartz (Co-Founders of Eventbrite), Emily Chiu (Managing Principal of Cash App), Louis Beryl (Founder of Earnest), Mike Vaughan (former COO of Venmo), Jackson Gates (Founder of Manresa Ventures), Stephany Kirkpatrick (Founder of Orum), and Avi Karnani (Co-Founder of Alice).

Rightfoot’s core technology is a suite of APIs that enables developers to quickly and easily add debt repayment capabilities to any application. Rightfoot has built the “piping” that streamlines repayments across a fragmented market of loan servicers that are still running systems built on COBOL in the 1970s. While Rightfoot built its initial wedge enabling student debt repayment, the company’s vision is to develop the first comprehensive debt repayment APIs that address all $14 trillion of U.S. consumer debt, including credit card, auto, and mortgage payments.

“Rather than build one point product, Rightfoot’s flexible APIs will enable thousands of fintech developers to embed debt repayment into their products,” said Sarah Smith, partner at Bain Capital Ventures. “With Rightfoot, developers can be up in hours, without the headache of creating and maintaining thousands of connections to loan servicers, while consumers get more streamlined ways to pay off their debts, saving in interest and fees. At BCV, we’ve been investing in fintech founders for over 20 years and it’s rare to meet a team with a unique vision to disrupt a massive industry who also has the technical and business chops to pull that off in a differentiated way, but we see that in the Rightfoot founders and are thrilled to back them at the seed stage.”

Today fintechs use Rightfoot to offer a variety of services, such as applications that automate repayments from a borrowers’ paycheck across outstanding debts. Employer benefits companies use Rightfoot to launch tax-free student debt repayment programs. In December, Congress extended tax-free student debt repayment benefits for employers through 2025. Rightfoot enables financial wellness, payroll, and employer benefits companies to create their own student debt repayment benefit offerings in one sprint, not years.

“Student loans are notoriously difficult for third parties such as employers, benefits providers, refinancers, or fintech apps to pay on behalf of borrowers, since they are not routable accounts like bank accounts,” said Louis Beryl, Founder of student loan refinancing company Earnest. “The Rightfoot team invested years building complex integrations with loan servicers. Rightfoot’s simple and clean APIs are the best way to add student debt repayment to any product. In the future I expect this routing technology to be available for all types of financial accounts.”

Today, when an entity makes a payment, they often send a paper check to the loan servicer. Checks can bounce, are costly to send, and cannot target repayment of a sub-loan, such as a user’s highest-interest loan. Alternatively, integrating directly with loan servicers requires costly and complex bespoke integrations with homegrown systems built decades ago. Rightfoot enables companies to outsource this messy repayment process by offering a faster, more accurate, and scalable solution.

“Student debt is a $1.6 trillion problem, growing at $33 billion a quarter, yet decades have passed without innovation in payments. The existing tech infrastructure is outdated and difficult for developers to work with,” said Danielle Pensack, Co-Founder and CEO of Rightfoot. “Our simple APIs empower the developer community to build products that tackle student debt, and eventually, any type of consumer debt.”

While Rightfoot can accept loan data from any source, the company has signed a partnership agreement with Plaid to offer developers a seamless way to add debt payments to their applications. Plaid provides liabilities data via API, such as a user’s account number, loan guarantor, and interest rate. With this data, Rightfoot is able to directly transfer funds from a funding source to a borrower’s loan account. The team is excited to work closely with Plaid and provide the “write” functionality to Plaid’s “read” liabilities data, as Rightfoot expands its product to cover payments beyond student loans.

“America is facing a consumer debt crisis, and fintechs are increasingly understanding the importance of supporting customers on their debt journeys,” said Mike Vaughan, former COO of Venmo. “Rightfoot’s modern debt payment infrastructure is opening the door for fintechs to play a prominent, more inclusive role in customers’ financial lives.”

The funding round enables Rightfoot to continue to build direct integrations with loan servicers, expand its engineering team to accelerate expansion into new debt verticals, and launch a completely self-service developer portal that will enable developers to get access to sandbox and instant production keys. The self-service portal is expected to launch at the end of Q1 2021.

About Rightfoot
Rightfoot’s simple APIs enable companies to embed student debt payments, and soon, other types of debt payments, into their financial stack. Rightfoot’s investors include Bain Capital Ventures, BoxGroup, SemperVirens Venture Capital, Stanford MBA professors, and founders and executives from companies like Plaid, Marqeta, Venmo, Earnest, and CashApp. Rightfoot was founded by Danielle Pensack, Deirdre Clute, and William Schmitt and is part of Stanford’s StartX community. To learn more about Rightfoot, please contact us at info@rightfoot.com or visit www.rightfoot.com.

About Bain Capital Ventures
Bain Capital Ventures partners with disruptive founders to accelerate their ideas to market. The firm invests from seed to growth in startups driving transformation across industries, from SaaS, infrastructure software and security to fintech and healthcare to commerce and consumer tech. The firm has helped launch and commercialize more than 240 companies, including DocuSign, Jet.com, Lime, LinkedIn, Redis Labs, Rent the Runway, Rubrik, SendGrid and SurveyMonkey. Bain Capital Ventures has $6.1 billion in assets under management with offices in San Francisco, New York, Boston, and Palo Alto. Follow the firm via LinkedIn and Twitter.