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Fizz: A Credit-Building Debit Card Aimed at Helping Gen Z College Students

Image Credits: Fizz
By: Headliners News / July 8, 2024

Inspired by the financial challenges faced by Gen Z college students, co-founders, Carlo Kobe and Scott Smith dropped out of Harvard and Cornell to create Fizz, a new and innovative startup focused on providing a debit card that helps build credit and improve financial literacy. Fizz aims to address the unique needs of college students by integrating AI-driven budgeting tools and gamified financial education into its platform.

Their Core Offering:

Fizz is more than just a debit card; it is a comprehensive financial tool designed to help students build credit and gain financial independence. Key features include:

  • AI Budgeting Product: Helps students manage their finances efficiently.
  • Gamified Financial Literacy Courses: Interactive quizzes to educate users on financial matters.
  • Credit-Building: Enables students to build credit without needing co-signers or security deposits.

A Unique Approach to Finance:

Fizz’s approach differs from traditional financial products in several ways:

  • Infrastructure: The startup built its own tech stack and banking infrastructure from scratch, ensuring greater control and reliability.
  • Direct Banking Partnership: Instead of relying on third-party banking-as-a-service (BaaS) providers, Fizz established a direct partnership with Lead Bank and collaborated with Mastercard and credit bureaus.

Growth and Funding:

Since its public launch in early 2023, Fizz has experienced significant growth:

  • Customer Base: Tens of thousands of users across over 300 colleges and universities.
  • Annual Card Volume: Expected to cross nine figures.
  • Funding: Raised $14.4 million in seed funding led by Kleiner Perkins, with participation from SV Angel, Y Combinator, New Era Ventures, and founders from various unicorns.

Revenue Model:

Fizz generates revenue primarily through interchange fees and partnerships with brands for exclusive offers and discounts. The core credit-building financial service is provided for free, with potential future revenue streams from optional subscription products.

Team and Expertise:

The 11-person team includes senior engineers and designers from Meta, Microsoft, and Amex, leveraging their expertise to build a robust and user-friendly platform.

Market Potential:

Fizz addresses a significant gap in the market by offering a product tailored to the financial needs of Gen Z college students, who are generally credit card averse but understand the importance of building credit. The platform competes with established players like Discover, Capital One, Bank of America, Rocket Money, and Credit Karma.

Future Growth Plans:

With the new funding, Fizz plans to expand its reach, enhance its product features, and continue hiring in sales, marketing, and engineering. The company aims to release new AI-driven financial products and strengthen its position in the Gen Z market.

Investors Perspective:

Kleiner Perkins partner Ilya Fushman highlighted Fizz’s unique approach to addressing the financial needs of college students, emphasizing the importance of building credit and financial independence without the drawbacks of traditional credit cards.

Fizz is well-positioned to revolutionize the way Gen Z college students manage their finances, offering a blend of credit-building capabilities, financial education, and user-friendly technology. With strong backing from investors and a clear vision, Fizz aims to become a key player in the fintech space for young adults.

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