LOS ANGELES–Music industry icon Jay-Z has become a key investor in a new app designed to help consumers build credit scores by tapping into non-traditional data points.
Jay-Z’s Marcy Venture Partners has invested in Perch Credit, which was founded in 2019, as part of its seed investment round of $2.5 million.
Other Perch investors include Citi, Softbank Opportunity Fund, Concrete Rose and Village Capital. Before launch, the app had waitlist of 25,000 prospective users. The service launched on iOS in late January and quickly made its mark on Jan. 26 as the number four Product of the Day on Product Hunt, a product sharing and discovery platform that features comments and a voting structure similar to Reddit, according to Forbes.
Perch Credit CEO Michael Broughton, 21, and CTO Ayush Jain co-founded the company to help young adults quickly build good credit scores by tapping non-traditional sources of data, according to Forbes. Those would include recurring payments such as rent and Spotify, as well as Netflix and Hulu subscriptions that are common among young adults.
MVP, which was co-founded by Roc Nation co-founders Jay-Z and Jay Brown with venture capitalist Larry Marcus, is enabling Perch Credit to automate credit score building and offer free access to other financial and educational tools. With direct ties to the music industry, the firm also positions Broughton and Ayush to develop new fintech solutions specifically designed to support young recording artists, Forbes reported.
The Inspiration
Broughton told the publication he was inspired to create Perch after facing financial difficulty entering college at the University of Southern California. As one of seven children in a military family, he lived in Japan and South Korea from ages eight through 16. When he moved back to the U.S., he was unfamiliar with the credit system and one of the first members of in his family to apply to college in the states, Forbes reported. Soon he discovered that he was $10,000 short on tuition but denied by loan programs. Eventually he settled the difference with the university and was able to enroll in courses.
The first investment that Perch received was a $250,000 check from MVP. The co-founders enjoyed hyper growth last year and entered Y Combinator (YC), one of the world’s largest incubators for companies including Airbnb, DoorDash and Twitch. The entrepreneurs built the app last summer and have since been collaborating with the music industry’s Roc Nation as well as record producer, songwriter and record executive Tahj Morgan, Forbes added.
“Too many 18-24-year-olds lack access to the right financial tools and the impact of this problem compounds for years, sometimes decades, into adulthood,” Sean Mendy, managing director at Concrete Rose, told Forbes. “The Perch team is building something exciting that will close this significant societal gap.”
Quick Score Created
According to Perch, by pulling a user’s existing payments and subscriptions to demonstrate responsibility to U.S. credit bureau partners, the app quickly establishes his or her credit history. According to Broughton, users typically notice improved credit scores in less than 30 days versus traditional credit card and loan-based methods that typically take between six and eight months on average for the same results.
Today Perch has more than 3,000 users with 1,000 additional people invited to sign up each week. The wait list is also still growing, and looking forward, the company’s first major milestone will be connecting more than 100,000 users, Forbes reported.