While WeWork made headlines this year for its irresponsible, rapid growth, Pepper Financial has built a financial analytics company that helps digital companies grow responsibly. DTC and app-based businesses face uncertainty about speculative customer lifetime value and customer acquisition cost, but through Pepper’s platform, businesses can project these costs and allocate money where it matters, efficiently and effectively. Pepper’s platform is set to publicly launch in early 2020 and the beta will be accessible for free.
LA TechWatch sat down with CEO and Cofounder James Borow to learn how the venture came to fruition from the team’s previous experience at Snap, the company’s future growth plans, and recent round of seed funding.
Who were your investors and how much did you raise?
We raised $5.6M in Seed funding from Upfront Ventures, Lerer Hippeau, Manta Ray Ventures, and some great angel investors.
Tell us about your product or service.
We are a financial analytics platform that gives modern businesses a new perspective on their financial health. Launching in Q1 2020, companies interested can request an invitation to use Pepper by signing up for our waitlist at TryPepper.com.
We’re a team of early Snap employees, who built Snap’s self-service advertising business and grew the company’s overall revenue from $0 to more than $1.5B annualized revenue in three years. There is constant pressure and an expectation for digital companies today to demonstrate rapid growth-at-all-costs, and we’ve seen first-hand how this can affect the long-term viability of businesses if not done responsibly. We created Pepper to help better manage this.
How is Pepper different?
Our mission is to help modern businesses grow smarter by giving them a new perspective on their financial health. We’ll be bringing a new lens to fintech in a way no one has ever done before.
What market are you targeting and how big is it?
We are targeting modern businesses that have been built and run online. We expect this will largely be mobile apps and direct-to-consumers to start.
What’s your business model?
Pepper will be free to start. We’ll have more details to share on future revenue plans in Q1 2020.
What was the funding process like?
As we looked to raise our initial round of funding, we wanted to find investors that not only believed in Pepper’s mission and our product but also the importance of developing a team with a strong set of values.
While we met with many incredible investors, it became clear that Upfront Ventures, Lerer Hippeau, and Manta Ray were the best partners for Pepper. Along with these firms, we were fortunate enough to have a great group of angel investors participate.
We’re certainly thankful for having gone through the funding raising process and finding the best set of investors for our business.
What are the biggest challenges that you faced while raising capital?
The most challenging part was ultimately making sure there was a strong fit between the belief in our mission, product vision, and culture. This being our initial Seed round of funding it was critical for us to take our time to find the right investors for Pepper at the onset of our business.
What factors about your business led your investors to write the check?
In addition to our experience at Snap and scaling fast-growing digital businesses, we have a list of notable advisors and board members. Former & current Snap executives involved as investors and advisors include:
- Imran Khan (Former CSO, Snap; Co-founder/CEO, Verishop)
- Jeff Lucas (Former head of Global Sales, Snap)
- Omar Hasan (Former Global Head of Sales Finance)
- Dante DiCicco (Snap’s Head of International Expansion)
- Cristina Grace Borow (One of the first 10 business hires at Snap)
- Diane Casey-Landry (Former COO, American Bankers Association)
- Kim Perell (CEO, Amobee)
- Stephano Kim (Former CSO, Turner)
- Kelly Graziadei (Founding Partner, F7 Ventures)
- Clark Landry, one of the best angels in LA
- Brandon Berger, former Chief Digital Officer of Ogilvy
- Michael DeGiorgio, founder and CEO of Crexi
What are the milestones you plan to achieve in the next six months?
We plan to introduce our product in Q1.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Have conviction in what you’re building and the problems that it solves for. Along with that conviction, companies should remain focused on building the best product for their customers. Capital will inevitably flow to the products that have a market fit and loyal customers.
Capital will inevitably flow to the products that have a market fit and loyal customers.
Where do you see the company going now over the near term?
For now, we’re focused on our Q1 beta and ensuring the best possible experience for the initial set of companies that will use Pepper. Beyond the beta, we intend to continue developing our product to deliver on our mission to help modern businesses grow smarter by giving them a new perspective on their financial health.
Do you prefer hiking or surfing in LA?
Hiking in LA is one of my favorite activities to do with my wife, 6-month old daughter, and our dog Pumpkin. It’s always a great family day out.