Tally

What did it do?

Tally was a San Francisco-based fintech start-up that let users manage their credit card debt in a single app and paid off high-interest balances with a lower-interest loan. By automating payments, it aimed to reduce consumers' interest burden. In 2024 it shut its consumer app and turned to offering its technology to financial institutions.

Why did it shut down?

Lending directly to consumers required a lot of capital, and according to Fintech Nexus's assessment the company could not make those economics work at scale. In April 2024 it shut its consumer app and switched to a B2B model, but the big partner it announced was never named. In a climate where investment in financial services start-ups had fallen sharply, no new funding could be found. In August 2024 the company, valued at $855 million, shut down.

The story

The farewell of a nine-year-old fintech company fitted into a single LinkedIn post. In August 2024 Tally's founder and CEO Jason Brown announced in a short note that they had decided to shut the company down. According to Brown, every option had been tried, but no funding could be found to keep operating. According to PitchBook data, Tally had 183 employees at the time, and its last valuation was $855 million.

Tally was founded in San Francisco in 2015 with the idea of making credit card debt, one of Americans' most expensive forms of borrowing, manageable. The app gathered a user's cards in one place, paid off high-interest balances with a lower-interest loan offered by the company and automated payments. In 2019 came a $50 million Series C led by Andreessen Horowitz, with Kleiner Perkins, Shasta Ventures, Cowboy Ventures and Sway Ventures taking part. With an $80 million Series D led by Sway Ventures in October 2022, total investment reached $172 million.

But for a fintech lending directly to consumers, every step of growth demanded capital. According to Fintech Nexus's assessment in April 2024, Tally's technology was strong, but the company had not made the economics work at scale. That same month Tally announced that it was shutting its consumer app and moving to a B2B model in which it would embed its technology in other financial institutions' apps. According to the company, a large public consumer company with more than 50 million users would start using the product as a launch partner in July; but that partner was never named.

There was no time for the pivot to bear fruit. According to Crunchbase data, investment in financial services start-ups had fallen 75 per cent from its peak in the second quarter of 2021, and in this climate Tally could not find new capital. Less than two years after its Series D, in August 2024, the company shut down.

Tally's story is a reminder that the value of a lending consumer fintech is set less by its user numbers than by its funding costs and credit risk. Deciding to change the model when cheap money runs out may be right, but that decision only stands a chance of paying off when it is taken while there is still enough cash.

Lessons for founders

• If you are building a fintech that lends from its own balance sheet, prepare scenarios for how your unit economics change when funding costs rise by a few points.
• Start a move to B2B before your cash runs out, while you still have at least 18 months of runway; enterprise sales cycles are slower than consumer growth.
• When announcing a pivot, wait for a signed, measurable first customer rather than leaning on a partner you cannot name.

Sources

1. a16z-backed fintech Tally, which raised $172M in funding, is shutting down after running out of cash (TechCrunch, 2024-08-12)
2. a16z-Backed Fintech Startup Tally Closes Doors (Crunchbase News, 2024-08-13)
3. Fintech Nexus Newsletter (April 3, 2024): Tally pivots to B2B, sunsetting its B2C app (Fintech Nexus, 2024-04-03)

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