Stacey Abrams Fintech Company Raises $9.5M

The Genesis of Now: From Personal Frustration to Fintech Solution

Stacey Abrams, alongside Lara O’Connor Hodgson, initially established Insomnia Consulting. This venture subsequently led to the creation of Nourish, born from a directly experienced need.

Abrams, a Georgia-based attorney and politician recognized for her advocacy in voting rights – particularly prominent in 2020 – recounts a situation during a campaign meeting. O’Connor Hodgson found herself reliant on a waiter to sterilize a baby bottle, prompting her to express a desire for a convenient, baby-specific bottled water option, akin to Dasani.

Challenges Faced by Nourish and the Birth of an Idea

Despite its initial success, Nourish encountered significant obstacles. Abrams attributes this not to a failing concept, but to systemic limitations hindering its expansion. Specifically, difficulties with invoice processing ultimately led to the company’s closure.

However, these setbacks proved pivotal, laying the groundwork for their subsequent company, aptly named Now. The founders discovered a critical gap in the market during their search for funding.

“We were seeking a loan to fulfill existing orders,” Abrams explained to TechCrunch. “However, the financial climate at the time – the credit crunch – made securing funding impossible. We faced rejection after rejection, as credit models shifted repeatedly. Ultimately, we were forced to cease operations; we essentially outgrew our capacity without a viable solution.”

Now: A Solution for Small Business Cash Flow

In 2010, Abrams and O’Connor Hodgson launched Now, designed to expedite invoice payments for small businesses. Through NowAccount, businesses can receive 100% of an invoice value, less a 3% merchant fee, upon submission.

O’Connor Hodgson clarifies their funding model: “We operate by selling bonds in the capital market, mirroring the approach of companies like American Express. This allows us to provide small businesses with immediate access to their revenue at a low cost.”

“We’ve also developed a robust system for managing the associated costs and risks, as we await payment from the invoice recipient over a 30+ day period.”

Recent Funding and Pandemic-Driven Demand

The Georgia-based company recently announced a $9.5 million Series A funding round, spearheaded by Virgo Investment Group. These funds will be allocated to scaling Now’s services.

This investment arrives at a time when the COVID-19 pandemic has exacerbated invoice payment delays for numerous businesses. O’Connor Hodgson notes that the average invoice payment timeframe has expanded from approximately 50 days to between 70 and 80 days.

“To date, we’ve assisted over 1,000 small businesses, processing more than $700 million in transactions,” states O’Connor Hodgson. “This represents $700 million in capital that these businesses have received more quickly.”

Growth Strategy and the Value Proposition

Currently, Now’s expansion has largely relied on positive word-of-mouth referrals. The new funding will be strategically invested in marketing and advertising initiatives to broaden the product’s reach.

“For small businesses facing persistent payment challenges, our solution often seems almost too good to be true,” Abrams observes. “A significant part of our scaling challenge lies in conveying the genuine effectiveness of our service. We need businesses to experience the benefits firsthand to fully appreciate the value we provide.”

Now offers a tangible solution, allowing companies to realize the benefits of faster access to their earned revenue.