According to the Freelancers Union and 2018 federal self-employment statistics, about one third of the US population is self-employed, and about half of the population will be engaged in freelance work by the year 2027. However, the financial services sector has yet to catch up with this growing trend; 63 percent of freelancers surveyed by the Freelancers Union admitted to feeling anxious when managing their financials, taxes and insurance.
Joust, a Denver-based neobank platform, is hoping to fill that gap.
“At Joust, we understand the growing market of self-employed workers, freelancers, and small businesses, and their need for an all-in-one banking solution—especially one that gives them the same benefits enjoyed by major corporations,” Joust co-founder and CEO Lamine Zarrad said in a statement.
“Our platform not only saves time, but also reduces uncertainty and mitigates the risk of late and non-payment.”
According to Tech Startups, the company is the first all-inclusive banking platform for freelancers, contractors, entrepreneurs and self-employed workers in the United States.
Joust essentially combines an FDIC-insured bank account with a “small business” merchant account, allowing its users to accept all forms of payments and transactions directly into one account.
The app can automatically set money aside for taxes; earn interest and create customised savings goals; tokenise, encrypt and store clients’ card and bank data in a secure third-party vault; and even facilitate a fully automated dispute resolution process that works directly with debit and credit card networks.
“Freelancers require credit and banking products that mirror the user experience of the consumer market but the product sophistication of the small business market,” said Dave Fields, founder and managing partner of PTB Ventures, one of Joust’s recent investors.
“Existing financial market infrastructure just isn’t built to provide this bundle. Through the use of contextual data and proprietary risk algorithms, Joust reduces the cost, complexity and risk of becoming a solopreneur.”
Its trademark PayArmour invoicing platform helps users to not only manage their invoices and payments, but it also provides invoice protection insurance.
“Joust has accomplished a rare feat in FinTech: They’ve brought a truly differentiated product to market,” said Ryan Falvey, managing partner at Financial Venture Studio. “PayArmour has proven it can smooth income and expenses for small businesses, improving the financial health of an important segment in our economy.”
With PayAmour, users can protect themselves against late or missed payments, a common problem for freelancers and entrepreneurs.
For a one percent flat fee, PayAmour can offer a 30-day payment guarantee on invoices up to $2,500. The platform can also instantly fund invoices up to $5,000 for a flat fee of six percent: 50 percent of the payment will be instantly available, and the rest will be deposited once the client or customer pays.
The neobank has recently raised $2.6 million funding round led by PTB Ventures, with participation by Accion Venture Lab, Financial Venture Studio and Techstars. Joust plans to expand its offerings with the funds. According to the company’s website, bookkeeping, time keeping, expense management, tax management and contract management features will be added to the Joust platform.
“Freelancers and entrepreneurs are often forced to manage their finances at the mercy of irregular cash flows and late or inconsistent payments,” said Accion CEO Michael Schlein. “We’re pleased to be part of Joust’s innovative solution targeting an underserved and increasingly important segment of the US economy.”