July 21, 2011 | Press Release

LOS ANGELES, Calif. — July 21, 2011 — ZestCash, Inc., a financial services technology startup committed to serving the needs of the underbanked, today announced it has closed a $19 million round of funding. The company raised an $11 million Series A round led by Lightspeed Venture Partners and GRP Partners with participation from Flybridge Capital Partners. The company will primarily use this capital to grow operations, hire technical talent and expand product availability into additional states.

The company also raised a separate $8 million line of debt financing from Lighthouse Capital Partners to fund its growing customer loan portfolio.

Since launching its product less than a year ago, the company has grown to more than 40 employees with significant expansion in engineering and machine learning.  It now has thousands of customers who, in aggregate, have borrowed more than a million dollars from the company. ZestCash also recently expanded its executive team with the addition of Mike Armstrong, a former marketing executive at Capital One, who will lead customer acquisition efforts.

ZestCash was founded by Douglas Merrill, former Chief Information Officer of Google, and Shawn Budde, former Chief Customer Officer of Capital One, to provide fair and transparent credit alternatives to borrowers who do not have access to traditional credit. The company offers short-term installment loans designed to help people cover unexpected costs and basic life necessities such as medical bills, auto repairs, and rent.

“Our goal is to help improve the financial lives of millions of Americans,” said Douglas Merrill, Founder and CEO of ZestCash. “We’re taking an entirely different approach to underwriting that combines Google-style machine learning techniques, large-scale data analysis, and traditional credit scoring. The result is better loan decisions and more credit availability for the people who need it most.”

Most traditional lenders determine who they will lend to using a small amount of information purchased from a credit data provider. When this data is missing or negative, the borrower is turned away. As a result, many people are denied credit because old world processes don’t take advantage of today’s data-rich environment. Before ZestCash, this segment would have to turn to use costly payday loans, pawn shops or bank overdrafts.

Jeremy Liew, Managing Director at Lightspeed Capital, said, “More data has always led to better underwriting, from the time student lenders realized they were better off lending to an A student studying Pre-Med at Stanford than a D student at a community college. ZestCash has taken the abundance of data now available, from behavioral data like rent payments to social behavior such as number of recent residences, and uses it to better estimate risk for the many Americans who don’t have access to traditional credit. It’s smart, it’s fair, and it’s very exciting,” he said.

Brian McLoughlin, Partner at GRP Partners, said, “The company is bringing a fresh, consumer Internet experience to lending. Customers design their own loans, apply online, talk to a real person, and get their money in 24 hours or less.  ZestCash’s customers love the user interface and personal service,” he said.

ZestCash loans are currently available in Missouri, Utah, Idaho and South Dakota. The company plans to expand product availability into additional states in the coming year.

About ZestCash, Inc.
ZestCash offers fair and transparent credit alternatives to underbanked Americans who do not have access to credit from traditional lending institutions. The company offers short-term installment loans designed to help people cover unexpected bills and basic life necessities. The company was founded in September, 2009 by Douglas Merrill, the former Chief Information Officer of Google, and Shawn Budde, the former Chief Customer Officer of Capital One. For more information, please visit www.zestcash.com.