Jared Hecht, 26, makes startups look easy.
He sold his first company, GroupMe, 370 days after it launched for ~ $US80 million. GroupMe, a group text messaging app, was acquired by Skype in 2010.
Last fall, Hecht and his GroupMe co-founder Stever Martocci left Skype. Both are doing new startups and while they aren’t business partners any more, they hold equity in each others’ ventures.
Hecht’s new startup is called Fundera and he’s armed with $US3.4 million from investors such as First Round Capital, Lerer Ventures, Khosla Ventures, SV Angel and David Tisch. His co-founders are former Gilt Groupe engineer Rohan Deshpande and former Outbrain director Andres Moran. Their mission: to help other founders get their businesses off the ground.
Fundera is a marketplace that helps small businesses get loans from non-bank lenders. Hecht first got the idea for Fundera two years ago when he watched a family member struggle to get a loan from a bank.
His wife’s cousin owned a chain of successful restaurants, Fusion. Yet he couldn’t get a loan from a bank and he didn’t want to take an equity investment that would dilute his stake. Both of the entrepreneur’s restaurants were profitable; they employed about 50 people each and generated hundreds of thousands of dollars in EBIDA. It seemed like a business worthy of a loan. But Hecht says 75% of small businesses are denied the funds they need by banks.
Fundera works with 20 non-bank lenders and matches them to small businesses who might be in need of their help. Small businesses fill out a quick 4-minute common-loan application which asks about their needs, financials, and business owners. It isn’t a peer to peer lending network, like Prospr or Lending Club. Fundera works with organisations that exist soley to give companies like Fusion funding and makes these solutions easier for entrepreneurs to find.
There’s a lot of competition in the small business loans space. Companies like Funding Circle are already big in Europe and they’ve raised piles of cash from investors. But Hecht thinks the small business loans space will only continue heating up.
“Alternative lending is a major trend that has emerged out of dissatisfaction with banks,” says Hecht. “It’s one of the most exciting industries I’ve seen in a very, very long time. Fundera solves a problem that hit very close to home. Also, this is an industry where the internet has not had a transformative effect.”
A small business loans company might not sound as sexy as a messaging app, but Hecht is excited about the opportunity. And this time, he’s excited to build a business that makes money from the get-go.
“GroupMe started off as reply-all texting. By no means did we ever think it’d be a sexy thing to do,” says Hecht. “It was the right thing at right time…Personally, I think the fact that small businesses have been neglected — I think it has the potential to be very successful — and sexy.” As proof, Hecht turns to Jack Dorsey’s payment application, Square. “I think Square is the sexiest piece of financial software and the sexiest cash register machine I’ve ever seen in my life,” he says.