Money can make people moody. There are layers of privilege, or lack thereof, that can make even the simplest conversation about bills feel like baggage to deal with. Translate that discomfort to relationships and it can feel like an awkward — and fragmented — dance on who pays which bill when (and how).
Ivella, a Santa Monica-based startup, wants to build banking products for couples to take away some of these tensions. Led by CEO and co-founder Kahlil Lalji, the startup is launching with a split account product that just raised $3.5 million in funding from Anthemis, Financial Venture Studio and Soma Capital. Other investors include Y Combinator, DoNotPay CEO Joshua Browder and Gumroad CEO Sahil Lavingia.
Lalji, who helped creators with digital content before jumping into the world of fintech, says that the startup was born out of his own frustration at the expectation that couples would just use Venmo unless they were married. The best solution, so far, has been joint accounts: meaning that two people will set up an account where they — sing it with me now — join their accounts and pull from the same pool. Instead, Lalji wants to build a split account: couples maintain individual accounts and balances, but get an Ivella debit card that is linked to both of those accounts.
With that shared card, couples can set ratios — maybe prorate what percent of each bill someone pays depending on their income — and Ivella will automatically split any transactions made using the Ivella debit card.
This in and of itself was the largest technical challenge that Ivella was confronted with in its early days, describes Lalji. He said that peer-to-peer platforms still split payments “in a very rudimentary” way, while Ivella wanted to intercept transaction authorizations so that people are only charged what they set their ratio to be. “We have some real-time decision logic to determine what are the balances of these two user accounts? Can both users support their end of the payment based off of their default split? If so, move the money and then send back an approval.” The company built out an internal ledger to track the way that money is moving between user accounts, in a way that the co-founder thinks a lot of other fintechs don’t.
This wasn’t how the startup, well, started. The first iteration of Ivella looked like, he admits, a P2P transfer platform with better UX. The team soon saw issues: “One of the largest modals of failure of the previous iteration was that payments and payment networks only interact with one user account.” For example, if you were trying to make a $100 transaction where you and your partner each had $50, it would reject the payment because it would only see one account; or, on the opposite end, if you only have $100 in your account but your partner has $0, the payment would get approved even though your partner doesn’t have enough money to hold up their …read more