jaris embedded finance dashboard

jaris: embedded finance platform for HoneyBook

After coming out of ‘stealth’ with a $31 million Series B in August, the embedded lending architecture fintech jaris announced a partnership with HoneyBook.

According to CEO Chris Aristides, jaris built an embedded finance platform for the gig management firm called HoneyBook Capital. It allows HoneyBook users to access funding right where they usually access client payments, contracts, and invoicing. 

“You have to find a way to offer reasonable financing, and so the underwriting process is just, it’s super important. What I think about when we partner with HoneyBook: ‘who should be better at knowing their customers than HoneyBook?’ And the answer is, nobody,” Aristides said.

“We should be using their data. We should be helping them underwrite. We should be helping these guys have competitive and reasonable financing.”

Without going into the details, Aristides said the announcement comes after months of working with HoneyBook, and many successful loans to independent contractors.

“The point is, like, the product is moving. There’s actually legitimate volume going through it,” Aristides said. “And we’ve spent a good amount of time together like tailoring it. So it’s, it’s in good shape. I’m happy with it.”

All in one box

Aristides said that jaris prides itself on building white-labeled underwriting solutions for any application. jaris brings a full embedded financing product in one box, offering underwriting, servicing, and financing, Aristides said. 

“So [with HoneyBook] we did all underwriting upfront, we created offers, customers took the offers, but now we have to maintain all those balances, we have to maintain compliance with our bank partnership. Then becomes like post loan, and then you go on to servicing and servicing requires licensing.”

With jaris, HoneyBook Capital can provide its customers with quick access to capital, a streamlined and straightforward application process, and an easy single fixed-fee repayment structure. Customers can receive funds as soon as the next business day.

“Right now, we’re actually taking care of the entire credit facility — we handle the risk component completely,” Aristides said. “At some point, we will also allow the partner to finance the customer as well.”

Coming out of ‘stealth’

The partnership comes after a successful funding round. Still, Aristides did not jump on the chance to comment on the fundraising. For the Burlingame, Calif. company based right outside of San Francisco, competition in Silicon Valley is challenging enough without broadcasting what they are working on. 

“I don’t really like talking much about us until we do more stuff. I don’t want people to announce $3 million rounds,” Aristides said. “Because, you know, in a lot of ways, the Valley’s a pretty competitive space. And when people figure out what you’re doing, they’re going to go, ‘Oh, I can do the same thing.'”

Since its founding in 2017, jaris has had its head down, building a platform without writing “the playbook for someone else,” Aristides said.

Growing gig economy, growing demand

Part of the good news was recognizing the great work done over at HoneyBook. Entrepreneurship has exploded in the last two years, with more than 4 million new business applications filed through September of 2021, and HoneyBook has been growing all the while. 

“We are thrilled to partner with jaris and bring our members to access the capital they need to manage and grow their businesses,” Oz Alon, CEO of HoneyBook, said in a release.

“Early on, we saw the demand for financial products and services, and more specifically, the ability to access capital faster and easier. HoneyBook Capital meets this need and deepens our mission to help independent businesses be successful.”

According to Statista, it’s estimated that the freelance economy will encompass more than 50 percent of the total US workforce by 2027

Two decades in the valley

Aristides has 18 years of financial services under his belt, and after years he said he had to take a step back. He had watched Silicon Valley grow with a front-row seat but waited until fintech progressed before joining in.

“I came out here in 2000, as an analyst first and then as a portfolio manager later, so I worked at a bunch of places you would probably know,” Aristides said. “Alliance Capital was my first shop, and then Citadel and SAIC and Magnetar, and a bunch of big funds and partner funds for a long time. And I watched this part of the country grow up to some degree, I wasn’t here for day one, but I was kind of here for day two, right?”

Tech and, more specifically, fintech grew to the point that in 2017, there was enough there to use, sufficient from a tech perspective where Aristides said he could start building financial applications.

The goal is to offer a middle path between hard-to-get bank small business loans and high-cost Merchant Cash Advances that most small businesses usually have to deal with, Aristides said.

“There are no rules to the MCA world,” Aristides said. “By definition, an MCA has no maximum term, has no minimum payment, and has pretty much no servicing rules whatsoever. Have you ever looked at the rates charged by an MCA provider?” Aristides said.

“If you’re a good old solid credit nerd like I am, the average blended factor rate for those seems to be about 130-133, which is a solid 150% to 250%. At a length of about six months, it’s like 250%.”

The way he offers a middle ground is through a banking partnership, but the servicing of in-house underwriting, Aristides said.

What’s next?

Besides building new embedded finance products for an increasing network of partners, the plan is to create a crack team of data scientists to manage the growing jaris ecosystem, Aristides said.

The partnership with HoneyBook is the latest in a series of announcements for jaris, including its collaboration with SpotOn to launch SpotOn Capital.

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