Turning Philanthropy into a Double Bottomline Business: Ram Palaniappan, CEO of Earnin (Part 4)

Ram Palaniappan: Once we got that algorithm, we were able to expand it to salaried workers as well. Another thing that was interesting was, when I started, I was pushing money out over ACH. It shows up in the employee’s bank account the next day. Over time, we integrated with every ATM and debit network in the country.

Today, when a customer asks for money, the money shows up in their bank account in less than a second. That has been opening up a lot of use cases for us. While people are in line at Walgreens, they can cash out their earnings. There have been a lot of product improvements that have opened up the market and made the product experience much better. We also raised more money along the way.

After the seed, we did an A round with Matrix as the lead. That was $22 million. Then we did a B round last year led by Andreessen Horowitz. That was $39 million.

Sramana Mitra: How many borrowers do you have in the process now?

Ram Palaniappan: We have employees from over 50,000 companies who use the product.

Sramana Mitra: What is the total number of borrowers?

Ram Palaniappan: We haven’t shared the number of users. A lot of these are large, well-known employers.

Sramana Mitra: Does that mean that you are going to market through these employers or are the employees finding you in a B2C mode?

Ram Palaniappan: The employees find us in a B2C mode but there are some employers who do promote us to their employee. Uber is one. Once the employees start using our product, they actually become better employees. Their attendance goes up. There are instances where employees cannot go to work because they don’t have cash to buy gas. In this case, they can use the app.

Sramana Mitra: Very interesting. I understand your business. What are the trends that you’re seeing in this community that you are catering to?

Ram Palaniappan: One is, the employees are getting better off. They’re getting less overdraft fees. They’re paying their bills on time. They’re getting to keep more money for themselves. The entire operation is supported by voluntary payments from our users. It’s very exciting to have that work. You get a feel of a community of people coming together to help each other stay out of bad times.

Sramana Mitra: Interesting. What else is interesting in your story that you’d like to share?

Ram Palaniappan: One thing that people find interesting is that this is something that started off with not the intent of becoming a business. Then, when I found out how powerful it is, that is when I realized that I have to do it. Otherwise, I’d feel bad about myself. Today, we have 70 employees and another 250 people doing customer support.

We have a good size engineering team that’s doing a lot of automation. We have product and data people. I like the fact that we’re still customer-focused. We started off as a way to help people. That part has never left the culture. Everybody is still very much focused on making the customer better off. We’re still very hands on. We’re very close to our customers.

Sramana Mitra: Thank you for your time.

This segment is part 4 in the series : Turning Philanthropy into a Double Bottomline Business: Ram Palaniappan, CEO of Earnin
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