By Ethan Wu and Emily Shiang
The first thing one notices about ThriveCash, a lending service, is exactly who it’s meant for. Its website is crammed with testimonials from beaming college students describing their experiences with ThriveCash. Anderson from Harvard got $5,000 to secure housing in NYC. Rachel from NYU went on summer getaways with friends. Tom from RIT paid off a security deposit. Friendly illustrations and a texting helpline complete the picture of a product targeted at enterprising—but perhaps financially inexperienced—undergrads.
ThriveCash touts its intuitive, transparent lending model. It doesn’t charge interest, as a typical credit institution would. Instead, it charges straightforward fees that depend on a loan’s size and duration. ThriveCash also lets borrowers delay debt repayments until they begin an internship or job.
Normal creditors might balk at this model, fearing the risk of lending to 20-somethings with no credit history. But ThriveCash’s principal innovation lies in its use of information. The firm asks borrowers to submit an offer letter for an upcoming internship or job—confirming access to future streams of income. Modest caps on loan amounts ensure first-time borrowers don’t get in under their heads.
In an interview with Cornell Business Review, Deepak Rao, co-founder of ThriveCash, noted this “information arbitrage”—using offer letters instead of credit history—allows his company to offer a carefully catered product to a small slice of the credit market. By focusing on pre-professional college students, largely juniors and seniors but also grad students, ThriveCash can offer a service that traditional banks with a much broader scope might not.
Rao, an international student from a low-income family, explained that he struggled to get help from traditional financial firms, despite attending Stanford. When his brother attended college in America, a now well-off Rao gladly covered his tuition and lodging expenses. But recreational trips were another matter, with Rao’s brother never quite feeling comfortable asking for help. Thus the inspiration for ThriveCash: “The inspiration came from my personal experience as a low-income international student where I got no help from banks or traditional financial institutions even after studying at a good school. Then my brother's experience taught me that this problem is not just limited to first-generation and low-income students, since I fortunately had enough money at the time to pay for his tuition and room and board. But he still felt bad asking me for money, for spring breaks and senior trips and things like that.”
Further expansion to new campuses is on the horizon for ThriveCash—as is a campus ambassador initiative, which Rao hopes to establish at Cornell. Beyond that, though, Rao’s ambitions remain focused, with no present hope of one day getting acquired by a bigger firm: “I’d be ending up in the same place where I was.” Formerly of Jack Dorsey’s Twitter, Rao joked, “Imagine two years from now I get acquired by some other company—just for kicks, think of Square. I’d be working for Jack again!”
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