Financial institutions are increasingly using automated models to accelerate credit decisions leveraging AI/ML. In order to build the next-generation models to handle these tasks, organizations must design systems that are reflective of the dynamics of a modern economy (prevalence of gig/flexible workers) and have the appropriate supporting data to assess. Argyle is an employment data platform that provides companies with real-time access to employment data that can be used in decisioning. All the data on the platform is user-permissioned, protecting the personal information of the applicant. In terms of employment, decisioning models have far too long stringently relied only on traditional W2 income for assessing worthiness, limiting access to the financial system for otherwise qualified potential borrowers. With Argyle, banking, lending, loan servicing, and insurance companies can get verified, real-time income data straight from the source. In addition to income and employment verification, the company also offers paycheck-linked lending, where loans are repaid directly from paycheck proceeds. The platform contains data and is integrated with 75% of the US workforce, covering 75M employees across 500K employers.
AlleyWatch caught up with Argyle Founder and CEO Shmulik Fishman to learn more about how his experience in adtech served as the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $77.6M, and much, much more…
Who were your investors and how much did you raise?
We raised $55M in Series B funding with investors SignalFire, Bain Capital Ventures, Bedrock, and Checkr.
Tell us about the product or service that Argyle offers.
Argyle is the leading employment data platform that provides companies access to user-permissioned employment records in real-time.
We help people avoid situations where their personal information is sold or used without their consent or knowledge, and we are on a mission to unlock equitable access to credit and financial resources for the exploding population of gig, creator economy, and contract workers.
On March 8, we announced the launch of Argyle Verify, the first self-serve tool for consumers to generate income and employment verification reports for free, a development that will further our mission of providing equal financial access to everyone.
Throughout my career, I’ve been attracted to marketplaces and businesses where there exists an underlying network of fragmented and extreme complexity. Translating these complexities into an accessible and simple process for the customer fascinates me. I had the opportunity to explore this during my time at Adap.tv, an ad marketplace. There are hundreds of millions of websites where ads can be placed – the options can be overwhelming. A company like Coca-Cola, for instance, needs one hub to effectively manage the placement of those ads. We developed a very simple access point for clients on top of a platform that abstracted away a ton of complexity and functionality and kept it behind the scenes. Another example of this was my time spent at STRATIM (now KAR Global), which was connected to hundreds of thousands of car dealerships. We made it easy for companies like Toyota to get their cars to all the designated dealerships in America.
In 2020, 7.3 million EIN numbers – i.e., tax-paying business entities operating in the U.S. – paid American workers, and 250,000 payroll service providers processed payroll on behalf of these companies. That’s a ton of complexity that my company Argyle is putting a “decomplexifying” layer on top of so workers can readily access their employment information and lenders can make more informed and up-to-date credit decisions.
How is Argyle different?
We’re making credit scores obsolete. We don’t believe that people should be evaluated on a single number over which they have little to no control – that feels overly basic and one-dimensional. Instead, we believe evaluating people on the actual work they are doing and their actual income and performance is more equitable and transparent. It is quite different from the traditional model and asks businesses to look at applications and consumers in a new way.
Argyle enables its business customers to make decisions based on income verification and employment data more equitable for all working individuals, not just full-time W2 employees. Building credit history and accessing financial services remain huge obstacles for contract and hourly workers.
What market does Argyle target and how big is it?
Argyle targets the $15B income and employment verification market – and we are taking on legacy companies like Experian that make huge profits on selling income and employment verifications on data that is static and may not reflect the actual real-time situation of a consumer.
1099 workers (gig, freelance, etc.) are often left behind and denied financial services because they don’t have the same predictable employment data records as full-time W-2 employees. In fact, new survey data from Argyle of over 1200 gig, freelance and contract workers shows that more than 63% of gig and freelance workers who have the means to pay for financial services were denied access because of their credit score.
Argyle’s rapidly growing coverage includes over 500,000 U.S. employers, including 60% of the Fortune 500, close to 100% of gig workers, and 170+ million U.S. employees. Propelled by today’s rapidly changing work landscape, Argyle sets a new standard for how credit risk is assessed. It opens the door to broader financial access for all consumers by addressing identity, employment, and income verification in a holistic and equitable way.
What’s your business model?
Overall, we’re in the business of financial services; transferring data that can help people with credit cards, banks, lenders, financial institutions, and verifying income information on their applications. The difference between us and the credit bureaus is that all of our data is user-permissioned. Our tools allow workers to transmit their own data to their financial service partners.
What are your post-COVID office plans?
We were operating successfully as a fully remote organization well before COVID-19 took remote work mainstream and we will continue working remotely post-pandemic. These days it matters even less where you work.
Our workforce spans five continents, 23 countries, and 16 languages with hubs in New York, California, and Europe.
What was the funding process like?
We took a novel, unconventional approach. Everyone makes a PowerPoint pitch deck, but we don’t want to be like everyone else. Similar to our A-round financing, we created a website that felt more like a mini-doc, allowing potential investors to pre-read and come to the table with knowledge and questions about Argyle. Ultimately, this helped facilitate better conversations and gave investors the option to deep-dive on the bits they found most interesting.
What are the biggest challenges that you faced while raising capital?
Ajay, one of our partners at Bain Capital, regularly tells me “you’re not selling argyle socks, you’re selling data.” He’s speaking to the complexity of understanding the business itself. What we do and who our customers are is not obvious at first, and so not every investor is willing to take time to get to know us and wade through the information. To get over that hump, we have leveraged our data into a compelling narrative.
What factors about your business led your investors to write the check?
Industries that are monopolistic in nature are harder to disrupt – especially those with a 20+ year monopoly. This is the space in which Argyle competes. We’re fearless, and we’re doing things other companies dare not do. Others may look at this space and decide they can’t disrupt it. But I’m passionate about making life better for our society, particularly for those who are experiencing inequality.
What are the milestones you plan to achieve in the next six months?
We will be accelerating the growth of Argyle’s in-house engineering team, focusing on international expansion, and scaling the company’s go-to-market operations.
We’re on a mission to build a full-stack solution where every type of income and worker is able to use our products, regardless of the type of work. Whether you’re a creative, a gig worker, or a desk worker, you’re able to use our product.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Coming off of our most recent funding, I learned to put client cases front and center. People want to understand how your customers are actually benefiting from the product. How are you making people’s lives better? If you’re looking for capital now or in the future, I would lean into highlighting the real-world solutions you’re creating.
Where do you see the company going now over the near term?
We’re aggressively hiring, expanding our network, and scaling our go-to marketing functions.
What’s your favorite outdoor dining restaurant in NYC?
It’s winter, so it’s indoors for me right now. I’m a big fan of Carbone in Soho. I’m a sucker for great Italian food.