It has been just around nine months when tech startup Activehours raised a funding worth $22 million for its cash-advance business, it seems the company has once again convinced the venture capital firms in successfully attracting investment worth $39 million.
The investment was headed by Andreessen Horowitz, with additional participation from existing investors Matrix Partners, Ribbit Capital and March Capital Partners. With this successful fundraising, the company has now raised a total of $65 million since it launched in 2013.
The company, based in Palo Alto, works as a payday lender, using a unique model where it asks users to pay a small voluntary fee to access their money ahead of the actual date of payment.
Activehours has not disclosed the size of its credit limit, but it has indicated that for banks and other investors who are looking for alternative source of gaining higher returns, the cash advance business can be a lucrative option.
An internal spokesperson said that the average tip is capped at around 15 percent, and no user is given an advance of more than $100 at a time. However, the company said that it is addressing a major challenge faced by American salaried workers who are living paycheck to paycheck.
Unlike its immediate competitor FlexWage, Activehours works directly with consumers, instead of employers.