Former Mint Head Raises $4.5M for Lean - Gig Worker Finance

The Evolving Financial Landscape for Gig Workers

Financial products are often not tailored to the specific requirements of those engaged in gig work and independent contracting, differing significantly from the needs of traditional employees.

This disparity was a key realization for Tilak Joshi, the founder of Lean, stemming from his previous leadership role at Mint and extensive experience as a product executive with both American Express and PayPal.

A Growing Unmet Need

The United States has witnessed a substantial increase in the number of independent workers in recent years. However, traditional financial institutions have, in Joshi’s assessment, been slow to adapt to this shift.

Seventy percent of independent workers reportedly live paycheck to paycheck, and a concerning 30% lack adequate insurance coverage. Joshi emphasizes that independent workers are poised to become the majority of the U.S. workforce.

Consequently, existing financial platforms and institutions must evolve rapidly to effectively support this growing segment.

Lean's Solution and Seed Funding

After departing from Mint in 2020, Joshi collaborated with Eden Kfir and Ramki Venkatachalam to establish Lean. Their objective is to provide gig workers with a platform offering financial products specifically designed to address their unique challenges.

Today, Lean announced the successful completion of a $4.5 million seed funding round. This round was spearheaded by Inspired Capital, with additional participation from Atelier Ventures, Oceans Ventures, and Acequia Capital.

The investment brings Lean’s total funding to almost $6 million.

Industry Support and Angel Investors

A notable aspect of this funding round is the involvement of numerous leaders from the marketplace industry. These include DoorDash executive Gokul Rajaram, Instacart co-founder Max Mullen, Manik Gupta (formerly CPO of Uber), Vivek Patel (ex-COO of Postmates), and Ryan Fujiu, CPO at Bird.

Further backing comes from prominent angel investors such as Charlie Songhurst, Justin Overdorff (Lightspeed Venture Partners and former Stripe executive), Marc Bhargava of Coinbase, and executives from ANGI Homeservices, Coinbase, and Plaid.

Addressing Financial Instability

Joshi explained to TechCrunch that independent workers often face some of the most challenging financial circumstances in the U.S.

He noted that workers frequently navigate multiple gig marketplaces, attempting to capitalize on incentives, which often leads to inefficiencies for both the marketplaces and the workers themselves. Marketplaces struggle with workforce stability, while workers remain in precarious financial positions.

Partnering with Marketplaces

Lean’s strategy centers on direct partnerships with marketplaces to deliver financial products and benefits to independent workers.

The aim is to assist marketplaces in attracting and retaining workers by providing access to resources like “no-cost capital, instant payouts, and financial products such as mortgages, low-to-no-cost borrowing, HSAs, and insurance.”

Broad Applicability and Integration

Lean collaborates with marketplaces of varying sizes, serving both 1099 and W2 workers across sectors including ride-hailing, courier services, healthcare, and construction.

Joshi believes that Lean can not only improve worker acquisition and retention but also unlock new revenue streams for marketplaces through financial product offerings and infrastructure, rather than relying on worker fees.

The platform is designed for swift integration with any marketplace, typically within two weeks.

Revenue Model and Future Plans

Lean anticipates reaching “hundreds of thousands” of gig workers nationwide in the coming months through its marketplace partnerships.

There are no costs for either marketplaces or workers to utilize the platform. Lean’s revenue model is based on fees associated with money movement facilitated through its system.

The startup has already secured agreements with half a dozen marketplaces, with another half dozen currently in negotiation.

The newly acquired capital will be used to expand Lean’s offerings and accelerate its growth across various marketplaces.

Inspired Capital's Perspective

Mark Batsiyan, a partner at Inspired Capital, highlighted the strength of the Lean team, the favorable market conditions, and the company’s unique approach as key factors in their investment decision.

“There are significant market trends supporting better service for gig workers, and marketplaces are actively seeking improved methods to attract and retain their workforce,” Batsiyan stated. He also noted that Joshi’s insight – that marketplaces would likely not develop these solutions independently – aligned with Inspired Capital’s own assessment.

Batsiyan further emphasized the distinctiveness of Lean’s B2B2C model, allowing for efficient distribution to end-users through its partnerships.

A Parallel Development

Earlier this year, Mint’s inaugural product manager secured $4.8 million in seed funding for Monarch, a subscription-based platform focused on helping consumers “plan and manage” their financial lives.