As a teenage model, Katrin Kaurov became financially independent at a young age. Alexandra Medina, whom she met at NYU Abu Dhabi, also learned to manage money early. The pair bonded as students over what they saw as a lack of a space for open conversations about financial wellness for people their age.
So they teamed up in 2021 to launch New York-based Frich, a startup that aims to serve as a social finance community for the Gen Z population.
The premise behind the company, they say, is that Gen Z is tired of inauthenticity. Unrealistic portrayals of financial success appear all over social media, and it leaves people wondering how they really compare financially to their peers, Kaurov and Medina say.
We realized that Gen Z has no idea what to do with money and we’re all pretending on social media that we have our lives together when in reality we don’t, Kaurov told TechCrunch in an interview. Are they really overdressed or are they actually living those luxurious lives? We just felt that there was a really strong disconnect between what’s showing up online and what banks and financial institutions are offering that Gen Z actually wants.
Users of Frich, which stands for Effing Rich, have the ability to ask questions anonymously on the app to better understand how others their age are doing financially without feeling competitive. They can also anonymously share financial data to see how they compare to peers. For example, a college freshman can see what others from similar backgrounds are spending on entertainment, investing, and rent. Questions users can ask include, for example, How much are people my age investing? So my classmates have extras?
I think one of the things that makes Gen Z really different from any other generation is that Gen Zers want to talk more about money, Kaurov said. They want to be open and honest about the realities of what’s really going on, like how much people are actually spending, what people’s credit scores are, and what they’re spending on a first date.
And for those looking for help improving their situation, Frich is ready to take data collected from users and connect them with relevant financial brands.
Frich operates primarily as a community-driven money app, Medina said. And our truly personalized approach aims to address the industry’s oversight of Gen Z. We can then leverage our understanding of user data and match those Gen Zers with the right brands and services. Her goal, she added, is to anticipate their needs before they arise.
The duo launched their app in the summer of 2021 and have since grown to over 100,000 Gen Z users nationwide, with key markets being New York, Florida and Texas. Frich is approaching $1 million in annual recurring revenue (ARR) with a B2B subscription model.
Frich makes money by partnering with banks and brands such as a credit originator or a lifestyle brand, and charging them a flat fee to be on its platform. This fee varies depending on the partner.
Interestingly, the company has taken an old fashioned marketing approach by visiting campuses across the country and using ambassadors to promote its offering in addition to promoting the app on digital platforms like TikTok.
Today, the six-person startup is announcing that Frich has raised $2.8 million in a seed funding round led by Restive Ventures, which included participation from TruStage, K20 and Spartan Innovations. The money so far has been used in part to make key hires, including a former Bumble employee to lead growth and an early Robinhood employee to work on product.
Cameron Peake, partner at Restive Ventures, told TechCrunch that his firm believes Frich really has its finger on the pulse of how Gen Z thinks and acts about money matters and has the potential to become a massive.
They send out very regular surveys, for example, to demystify some of them and that really excited us, Peake added. The consumer market is so vast that they can grow quickly.
Of course, Frich isn’t the only fintech aiming to serve the broader Gen Z market. In January, Alinea Invest, a fintech app offering AI wealth management aimed at Gen Z women, raised $3.4 million in seed funding before launching an AI virtual assistant that will help users with their investment needs. And Bloom, a zero-commission stock investment tool for teenage investors, came out of the blue last July, announcing it had reached 1 million downloads after launching in February 2022. Meanwhile in March, Miami-based Onyx Private, a digital bank the Y Combinator-backed offering of banking and investment services to high-earning millennials and Gen Zers, announced it was winding down its banking operations and shifting to a B2B model instead.
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