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AI personal finance app Charlie joins a US neobank valued at $25B

A penguin, personal finance app
Image credit: Unsplash
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Charlie Finance, an AI personal finance app for achieving debt-freedom, has been acquired by Chime, one of the fastest-growing US fintechs.

Co-founded by two Bulgarian entrepreneurs and part of the portfolio of Sofia-based LAUNCHub Ventures, Charlie will join Chime to boost its goal to help people gain more control over their financial lives. This follows the startup’s growth to over 500K registrations, 85M exchanged conversations, and $6B worth of users’ spending data, collected and analyzed in less than five years.

The news comes shortly after the neobank for fee-free banking, Chime raised a $750M Series G funding, reaching a valuation of $25B. Some of the leading investors in the latest round of the company were SoftBank, Sequoia Capital, and Tiger Global, and there are rumors that the $750M funding will position Chime for a potential IPO next year.

“We built Charlie to help consumers navigate their way out of debt during a time when credit card balances were near record-highs,” said Charlie CEO and co-founder, Ilian Georgiev. “As part of the Chime family, we’ll be able to further our goal of helping everyday Americans get a better understanding of where their money goes, and achieve financial freedom.”

The founders of Charlie, personal finance app
The founders of Charlie – Ilian Georgiev, Ivo Parashkevov, and Rob Luedeman (personal archives)

The all-in-one tool for debt-freedom

Founded in 2016 by Ilian Georgiev and Ivo Parashkevov, and their US co-founder Rob Luedeman, Charlie is an AI text message app for personal finances and to help young adults reduce financial anxiety. 

With a target customer base of Americans under 30 who have a relatively low standard of living, the aim of Charlie was to enable its users to find better ways to save, make the right financial decisions, and avoid going into debt. By using machine learning models, the app was able to take into account the financial needs of each user and tailor its free financial advice.

The app’s algorithms analyze the spending habits of the users to show them that by making small payments in addition to the monthly minimum payments towards their debt, they can significantly reduce the number of years for debt repayment. The interactive chatbot supports users to spend their money on whatever they desire the most without any prejudice, but at the same time, it shows them from which activities and purchases they can save off. This means that users can pay down more debt without the need to change their spending habits. 

Read more:  Sofia-based VC LAUNCHub Ventures with a new company exit

The website of Charlie Finance states that the app itself will stop functioning after the acquisition.  The team of Charlie will continue to focus on helping young Americans better manage their debts and have financial peace of mind. 

The young adults’ growing demand for debt management tech

In a nutshell over the course of 5 years, the smart money management chatbot has grown into an end-to-end solution for debt-free management of personal finances. It has been circulated that on average the users of the apps are able to set aside $66 every month, which helps them to save around $30K of interest fees, and as a result, be able to pay their credit card debts 19 years faster.

In July this year, in addition to its existing debt management tools, Charlie introduced a DirectPay feature that allowed users to connect their credit cards to their debt funds in the app so that they could pay down their debts faster.  

According to data from Crunchbase, since its inception, Charlie has raised more than $9M, with its latest post-Series A venture round happening in February 2020. Besides LAUNCHub Ventures, the other investors in the company have been the US-based Tuesday Capital, Peterson Ventures, Propel Venture Partners, Norwest Venture Partners, Uncork Capital, as well as the Bulgarian partner at Sequoia Capital, Bogomil Balkansky. 

This is a breaking story. Expect more info soon.

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Elena is an Innovation Reporter at The Recursive, an online media dedicated to the emerging tech and startup ecosystems in Southeast Europe. She is keen on sharing the innovation stories that shape the regional ecosystem and has a great interest in fintech, IoT, and biotech startups. Elena is currently finishing her Bachelor's Degree in Business Administration and Political Science at the American University in Bulgaria.