In January, the intriguing but ultimately unsuccessful startup Outbox announced it was shutting down its service that digitized U.S. postal mail. However, the team said at time that they weren’t done yet – having raised a $5 million Series A round just last summer, the founders were going to focus their efforts on a new product, they explained. Now we know what that new product is: it’s called Able, a “collaborative lender” that helps small businesses get credit from friends, family and friends.
Outbox, as a reminder, would collect and scan your postal mail on your behalf, allowing you to view it online. The service first launched in Austin before expanding to San Francisco in 2013. Though an interesting experiment, the company struggled to grow its user numbers, indicating there just wasn’t enough demand for its service.
So the team decided to shut down its operations earlier this year.
The new company Able is not up-and-running at this time, but is expected to launch later this summer. In the meantime, co-founders Evan Baehr and Will Davis have shared a blog post detailing their vision.
They explain that, with Able, they’re looking to serve the “Fortune 5 million – the 5.8 million small businesses that represent the backbone of the American economy,” they say. “These companies generate billions in revenues and employ 49% of our workforce, yet the majority of them cannot find reliable and affordable sources of credit,” it continues.
Able will help to provide credit to smaller entrepreneurs using a method to price risk through what they’re calling “collaborative underwriting.” Though the name sounds like it might be leveraging the so-called “wisdom of the crowds” for something like peer-to-peer lending, that’s not quite the case. Instead, the post says, they’re “innovating on the information layer, not simply the capital layer.” In other words, they’re using the crowd’s wisdom to price the loans, not entirely fund them.
The process will involve analyzing a business’s data through things like Yelp reviews, check-ins, and connections across social media. Able will then ask borrowers to gather three to five backers (family, friends, customers) to fund the first 25% of the loan, before Able funds the rest. Afterwards, Able collects regular payments from the borrower then distributes proceeds to the backers.
Though differentiated by its methods, Able will compete in a broader market with a number of other lending-focused startups, peer-to-peer and otherwise, including Google-backed Lending Club, CAN Capital, OnDeck, Zidisha, Prosper, SoFi, and others.
Before its public launch, Able has already loaned 40 growing businesses $5,000 to $150,000.