Payoff, Inc.

Payoff, Inc., previously known as Payoff.com, is a Costa Mesa, California-based financial services company that offers loans to customers for paying off their credit card debt.[1] Offering fixed-rate loans through a peer-to-peer lending platform, the company lends money to credit-worthy credit card debt holders.[2]

Payoff
TypePrivate
FoundedCosta Mesa, California
Headquarters3200 Park Center Drive,
Ste 800,
Costa Mesa, California
United States
Key people
Scott Saunders, Founder and CEO
ProductsPersonal finance, finance technology, financial services
Number of employees
101-150
Websitehttp://www.payoff.com

History

Payoff was founded in 2009 in Culver City, California by Scott Saunders and Eden Warner,[3][4] as a way to help consumers pay off their debt.[5] The company's initial business model, as Payoff.com, incorporated social media, gamification, behavioral science and an online expense tracking portal to help consumers manage and pay down their credit card debt.[6][7]

The company began to gradually move away from the social media and gamification programs for personal financial management to focus more on actively moving consumers to pay off debt.

In December 2012, the company announced a Series B funding round which raised an additional $7M.[8]

Also in December 2012, the company announced a partnership with Encore Capital Group, a purchaser of consumer debt, to offer Payoff.com's debt reduction services to Encore's customers.[9]

In October 2014, the company announced that Mohamed El-Erian, former head of bond trading company PIMCO, was the lead investor in a $12M funding round.[10][11] It was later announced that he was joining the company's board of directors.[12]

Early in 2015, Arianna Huffington joined the company's board of directors.[13]

The company also announced that it had hired Dr. Galen Buckwalter, the former Chief Scientist at eHarmony, to integrate psychometric testing into its platform, with the goal of identifying borrowers who are most likely to repay their debt.[14]

Business model

Payoff earns money by charging interest on credit card debt payoff loans, including charging a platform fee to cover loan origination and closing costs. Payoff's prospective clients fill out an online application form which determines their loan rate.[15]

Payoff partners with Sandy, Utah-based First Electronic Bank to offer the loans and manage client payments.[16][17]

Products and services

Payoff has several branded products that are offered to borrowers.

  • Payoff Loan - The company's primary offering is the Payoff Loan. Clients apply on the Payoff.com website, and if the client is approved, funds are electronically transferred to the client's bank account.[18]
  • Lift - Lift is a program designed to enhance the credit profiles of borrowers who are rejected for Payoff loans. The company integrates behavioral science techniques into tools and training designed to help clients get out of debt.[19]
  • Payoff Living Blog - Payoff also publishes tips and techniques for helping clients get out of debt and make the most of their money.[20]
  • Payoff Financial Personality Quiz - Developed by Dr. Galen Buckwalter of eHarmony, this personality quiz uses the Big Five to identify and describe a person's personality as it relates to money.[21]

Investors

Participants in the company's seed funding round of $1.7M in April 2007 included Great Oaks Venture Capital, FirstMark Capital, Jarl; Mohn, CEO of NPR, and Jim Nordstrom from the Nordstrom retailing family.[4] In January 2012, the company held a Series A angel round of investing which raised an additional $4.1M, and included Anthemis Group and Capital R Investments, along with additional funding from FirstMark Capital and Great Oaks Venture Capital.[4][22]

The company lists additional individual investors on their web site, including Kai Huang, founder of the Guitar Hero video game series, Bill Cvengros, founding member of PIMCO, and Brandon Beck, founder of video game publisher Riot Games.[23]

Notes
  1. "About us". Payoff.com. Retrieved 2014-12-12.
  2. "Famed Investor Mohamed El-Erian Joins Payoff Peer to Peer Lending Platform". CrowdFundInsider.com. 2014-10-22. Retrieved 2014-12-12.
  3. "Debt reduction firm raises $2 million". OCRegister.com. 2012-01-13. Retrieved 2014-12-12.
  4. "CrunchBase.com profile: Payoff.com". CrunchBase.com. Retrieved 2014-12-12.
  5. Hamilton, Walter (2011-10-20). "Internet booming with financial websites". LATimes.com. Retrieved 2014-12-12.
  6. "Payoff.com Review". MoneyCrashers.com. Retrieved 2014-12-12.
  7. "Payoff.com gives your financial motivation strength in numbers". SunTimes.com. 2011-06-26. Retrieved 2014-12-16.
  8. "Payoff.com Raises $7.0M For Personal Finance Efforts". SoCALtech.com. 2013-12-03. Retrieved 2014-12-16.
  9. "Payoff, Encore to Try Using Games to Reduce Distressed Debt". Questia Online Library. 2012-12-10. Retrieved 2014-12-12.
  10. "Mohamed El-Erian Is The Lead Investor In A Company Called Payoff". businessinsider.com. 2013-10-22. Retrieved 2014-12-12.
  11. "Payoff.com Gets $12M From Bond Guru". socalTECH.com. 2014-10-27. Retrieved 2014-12-16.
  12. "El-Erian Backs Costa Mesa Startup". OCBJ.com. 2014-12-15. Retrieved 2014-12-15.
  13. "Arianna Huffington Joins Peer-to-peer Company Payoff". FT.com. 2015-04-15.
  14. "Mohamed El-Erian joins peer-to-peer lender Payoff". CNBC.com. 2014-10-22. Retrieved 2014-12-12.
  15. "Rates and fees". Payoff.com. Retrieved 2014-12-15.
  16. "Payoff.com". Payoff.com. Retrieved 2014-12-15.
  17. "Institution directory: First Electronic Bank". FDIC.gov. Retrieved 2014-12-15.
  18. "How our loans work". Payoff.com. Retrieved 2014-12-15.
  19. "Is Payoff Bringing A Revolution In Peer-To-Peer Lending?". Bidnessetc.com. 2014-10-23. Retrieved 2014-12-15.
  20. "Payoff.com Blog". Payoff.com. Retrieved 2014-12-16.
  21. "Payoff FPQ". Payoff.com. Retrieved 2014-05-27.
  22. "Anthemis Group, FirstMark Capital, Great Oaks Venture Capital Invests in Payoff.com". maandate.com. 2012-01-12. Retrieved 2014-12-12.
  23. "Meet the Investors". Payoff.com. Retrieved 2014-12-12.
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