Ex-head of Mint, raises $4.5M to support Lean in order to provide financial products to gig workers
Independent workers and gig workers have different financial needs than salaried employees in a company.
Tilak Joshi, the founder of Lean, was acutely aware of this challenge during his time as Mint's head and as a product executive at American Express and PayPal.
According to him, the U.S. has experienced a significant shift in independent workers in recent decades, but traditional financial institutions have not kept up.
He said that 70% of independent workers are living paycheck to paycheck, and 30% are not adequately insured. Independent workers will soon make up the majority of the US workforce. The existing platforms, conversations, and institutions must rapidly adapt to accommodate them.
Joshi left Mint in 2020 and joined forces with Eden Kifr, Ramki Venkatachalam, to create Lean. Lean is a platform that provides access to financial products tailored to gig workers. Today, the startup announces that it raised $4.5 million in a seed funding round, which was led by Inspired Capital and included participation from Acequia Capital, Oceans Ventures, and Atelier Ventures.
A number of market industry players contributed money to the round, including DoorDash executive Gokul Rajaram, Instacart cofounder Max Mullen, Manik Gupta and Vivek Patel (ex-COO of Postmates), Bird CPO Ryan Fujiu, and others. Leans has raised nearly $6 million in financing to date. Charlie Songhurst, Lightspeed Venture Partners (and former Stripe exec), Justin Overdorff and Coinbases Marc Bhargava are some of the other prominent angels that have backed Leans. Plaid executives, ANGI Homeservices and Coinbase also backed the company.
Joshi explained to TechCrunch that independent workers face some of the most restrictive financial situations in America. Workers use gig marketplaces to solve their financial problems. Marketplaces offer incentives and try to keep them. But they don't know how to cheat the system. Both sides end up inefficiency, as marketplaces don't have the stability to have a stable workforce and workers are in tight spots.
Lean is a platform that partners directly with marketplaces to provide financial products and benefits to independent workers. Marketplaces can be helped with worker acquisition and retention through Lean's ability to provide gig workers with no-cost capital, instant payouts, and financial products like mortgages, low-to–no-cost borrowings, HSAs, and insurance.
Lean works with all types of marketplaces that have 1099 workers or W2 workers. These workers work in industries like ride-hailing and courier, healthcare, construction, and healthcare. Joshi stated that Lean can help increase worker retention and acquisition, and generate revenue through financial products and infrastructure. This is in addition to the possibility of generating more revenue than workers pay.
Joshi stated that the platform can be integrated with any market in less than two weeks. According to Joshi, Lean plans to roll out its marketplace partnerships to hundreds of thousands more gig workers in the country over the next few months.
Marketplaces are free and workers don't have to pay. Joshi stated that Lean hopes to make revenue from the platform's fees. The startup has already signed deals with more than a dozen marketplaces and has more in the pipeline.
The company intends to use the new capital to expand its offerings and scale across markets.
Inspired Capital partner Mark Batsiyan says that he was drawn to Lean by the market timing, approach, and team.
He wrote via email that there are enormous market tailwinds for better serving gig workers and that marketplaces are constantly looking for better ways to retain and attract workers. Tilak [Joshi] also reached a similar conclusion to Inspired: that these marketplaces wouldn't build such solutions. To make financial benefits turnkey, they need an intermediary such as Lean.
Batsiyan believes that the Leans B2B2C approach to business is also unique.
Lean, as a platform, can leverage its partnerships to make distribution more efficient to the end workers.
Mints' first product manager raised seed funding of $4.8 million for Monarch earlier this year. Monarch is a subscription-based platform designed to help consumers plan, manage and budget their finances.