Published on Behalf of Rohit Mittal '12SEAS
My co-founder, Priyank Singh '11SEAS, and I graduated from Columbia a few years ago. I did an MS in Operations Research and he did an MS in Computer Science. We both originally moved to the United States from India and, like all international students, we had to figure out a lot of new things, including transportation, culture, and housing.
Mittal and Singh (Photo: Stilt via Venture Beat)
The first thing I did for housing was to go through all the listings around campus. It took me more than three weeks to find housing and I had to sublet a room (that’s also how I met my co-founder). Renting an apartment was a challenge as landlords wanted to pull my credit history, and I had none. In the absence of that, they asked for at least six months' rent for deposit, which is an incredibly difficult amount to arrange.
This was just the first of many of the problems I faced due to zero credit history. My bank gave me a credit card with only a $500 limit, despite the fact that I had a checking account with a couple thousand dollars with the bank. I also had to pay a deposit to get a post-paid phone. The discrimination because of lack of credit history was huge for both of us even though we were hardworking, highly educated, financially responsible, and low-risk individuals.
After I graduated from Columbia, I worked at a credit risk consulting firm called Argus Information and Advisory Services. I saw first-hand that this industry was deeply broken. I worked on credit card portfolios of many major banks in the U.S. and realized that consumers are charged significantly higher interest rates and fees than they deserve. It takes years for an international person to build credit history and they stay locked out of the system until then.
I knew it could be done better. I naively assumed, perhaps hoped, that someone would provide better services to this high quality, yet underserved segment of the population.
However, I never thought that it would be us. In 2013, I moved to San Francisco to work as a data scientist at Popsugar. After Priyank moved to the Bay Area for his next job at Amazon, we started getting together regularly to hack prototypes of various ideas in different industries, just as a fun and creative output exercise outside of our jobs. Our prototypes included a tool for on-demand drivers to determine the optimal service to drive for on different days and times, text messaging based discount offers, among several others.
On a whim we decided to participate in a Startup Weekend and ended up building an API that other financial institutions could use to determine risk of "thin-file/no-file" users, similar to us when we were at Columbia, i.e., highly educated, capable, yet underserved by the current credit models. We are both data scientists, so we took a data-driven approach for building models that solve this problem. We won the competition and that boosted our confidence in the idea. Since we both had full-time jobs, we never pushed hard to move this idea forward but, just for fun and to be helpful to those suffering from similar problems, we founded Stilt and started lending our own money using the models on the side.
We realized that within a few months we had already done $80,000 in loans—our side project inherently validated our models. With this confidence and validation, we applied for Ycombinator’s W16 batch. We didn’t think it would happen because we were too small and Ycombinator is the world's best startup accelerator program with an acceptance rate of 1.3% (Harvard is 5%, Columbia is 7%).
To my surprise, we got in (how we did is a fun story for another time). During our partnership with Ycombinator, we focused on building the product and providing loans to as many individuals as we could. These past three months have been among the best in my life. I got to learn a lot from the smartest people in the world, worked on a product that I truly believe in, helped immigrants with access to credit, and provided loans of more than $500,000. We recently graduated from Ycombinator W16 batch and are excited to take our passion, our platform, and our products forward to provide excellent financial services to promising and deserving individuals.
--Rohit Mittal '12SEAS