Otto is a Dallas-based company that is building a mobile app that lets users get a loan at the same interest rate as standard credit cards based on the equity in their cars.
Helping the underbanked, but nicely. At first blush, this business model sounds predatory but in fact, it’s the exact opposite. Unlike other cards, Otto doesn’t charge fees or overdraft charges and will not require applicants to supply their FICO credit scores. The app is set to launch in early 2022.
“Millions of people every year take out what are called title loans — and it’s when you own your car outright, and basically go pledge the title of your car as collateral against the loan,” said Miller. “These loans are 30 days long. They are 500%+ APR, and they absolutely crush people.”
$4.5M seed financing with Mark Cuban. Uncommon Capital led the financing with participation from Pelion Venture Partners, 1930 Capital, Bloom VP and Spacecadet Ventures. Other investors include Mark Cuban, entrepreneur and Shark Tank investor; Leo Polovets, co-founder and general partner at Susa Ventures; Bill Clerico, co-founder and CEO of WePay; and Vivek Garipalli, co-founder and CEO of Clover Health.
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