Turning Philanthropy into a Double Bottomline Business: Ram Palaniappan, CEO of Earnin (Part 3)

Ram Palaniappan: Then I asked them to fill out a web form if they needed money. Once I had the web form up, people who I didn’t know tried to use it. I got access to their employer’s time attendance system, so I was able to do it for people who I didn’t know. That’s when I realized that what I was doing was very similar to a payroll system.

I looked at how much someone worked, converted it into a dollar amount, then I pushed it out to their bank account. I was doing sort of an API call for each individual for the amount that they needed. All their bills were being paid on time. There were no more overdraft fees or payday loans. Life was much simpler. That’s how the company started.

Sramana Mitra: When you wanted to do this at scale, what was the financing that you used to give them these loans?

Ram Palaniappan: Initially, I was doing this out of my bank account. Fairly soon, we raised a seed round from Camp One and Felicis.

Sramana Mitra: How much did you raise?

Ram Palaniappan: That was $4.1 million.

Sramana Mitra: How did you acquire customers for this particular venture?

Ram Palaniappan: We got customers from word of mouth and we also had some PR. The product is an innovative product. It’s novel in two ways. People were not used to the fact that they could choose when to get their pay. Secondly, we don’t charge interests or fees. We’re supported completely by voluntary payment from users. We did get a good amount of press initially because of the novelty.

Sramana Mitra: We’re talking 2012?

Ram Palaniappan: We launched the product in 2014.

Sramana Mitra: After the seed round, you started getting customers. What was the next major milestone?

Ram Palaniappan: Maybe I can talk about the progress of the company in a few different attributes. The product itself has evolved quite a bit. When we started off, we started with a few integrations with time attendance systems. Over time, we built that up to about 10 partnerships so we could automatically get the employee’s clock in and clock out time.

We also ended up getting a partnership with Uber. The Uber drivers would send us over an API. We also developed very interesting algorithms that now help us understand whether someone is working or not using data from their phones. When we started off, we were doing this only for hourly employees.

This segment is part 3 in the series : Turning Philanthropy into a Double Bottomline Business: Ram Palaniappan, CEO of Earnin
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