SeedFi

SeedFi, legally McBurberod Financial, Inc., was a US consumer financial health company that built lending, savings and credit-building products aimed at Americans with limited credit histories or who live paycheck to paycheck. It launched publicly in February 2021 with two products: a Credit Builder Plan, under which customers set aside as little as $10 per paycheck with the payments reported to credit bureaus, generating roughly $500 in savings in about six months; and the Borrow & Grow Plan, an installment-style product that gave borrowers immediate access to a portion of an approved amount while reserving the remainder in a savings account, positioned as an alternative to payday and high-cost installment loans.

The company underwrote customers who are difficult to assess through traditional methods, determining both the credit amount and the split between funds disbursed immediately and funds held as savings. A representative structure described by its lead investor was $500 disbursed now and $500 reserved in savings, with the borrower repaying $1,000 over time and ending the plan with savings accumulated. SeedFi later became the partner behind Credit Karma's Credit Builder feature, which pairs a line of credit with a secured savings account, and in December 2022 Intuit agreed to acquire the company and fold it into Credit Karma.

Founding story

SeedFi was founded in March 2019 by Jim McGinley (co-founder and CEO) and Eric Burton, among a founding team with experience at both startups and large banks including JPMorgan Chase and Capital One. McGinley had previously worked on responsible alternatives to payday lending for underserved communities. Burton grew up in a low-income household in Central Texas and described being trapped in a debt cycle; a Capital One job offer to him was temporarily rescinded over a poor credit record stemming from unpaid medical bills incurred at age 18. The founders framed the company around the view that legacy financial institutions are not designed to help financially struggling Americans make progress.

Business model

SeedFi extended consumer credit and credit-building plans directly to individuals, combining loan disbursements with mandatory savings accumulation and credit bureau reporting. It also served as the infrastructure partner behind another company's consumer credit-building product, licensing its technology and credit capabilities to Credit Karma.

The company lent to consumers under installment plans at interest rates it described as lower than payday and high-cost installment alternatives, funding its loan portfolio partly with debt capital raised in 2021.

Traction

After launching in private beta in 2019, SeedFi's initial customers built more than $500,000 in savings. Customers with no credit history reached a credit score of 600 after six months of on-time payments, and customers with existing scores and fewer than three credit accounts gained an average of 45 points. Through the Credit Karma partnership, members raised their scores by an average of 21 points in as little as 30 to 45 days and built over $10 million in savings.

Latest developments

In December 2022 Intuit announced an agreement to acquire SeedFi, subject to closing conditions and expected to close in the following months, with SeedFi becoming part of the Credit Karma business. Terms were not disclosed, and Intuit said the deal was not expected to materially affect its fiscal 2023 operating results. Intuit Ventures had been an investor in SeedFi's last financing round.