As a teen model, Katrin Kauloff achieved financial independence at a young age, and Alexandra Medina, who she met at NYU Abu Dhabi, also learned to manage money at an early age. The two bonded over the lack of forums their peers were willing to openly discuss financial wellbeing.
So in 2021, they teamed up to found New York City-based Frich, a startup that aims to serve as a social financial community for Gen Z.
The company's philosophy is that Gen Z is tired of insincerity: Social media is filled with unrealistic portrayals of financial success, leaving people to question how they really compare financially to their peers, Kauloff and Medina said.
“We realized that Gen Z has no idea how to handle money. Everyone on social media pretends that they have it going, but in reality, they're not,” Kauloff told TechCrunch in an interview. “Are they really overdrafting or are they really living a lavish lifestyle? We felt there was a huge disconnect between what was being shown online and what banks and financial institutions actually want from Gen Z.”
Frich (short for “Effing Rich”) users can ask questions anonymously on the app to better understand the financial situation of their peers without feeling competitive. They can also anonymously share their financial data to compare themselves with their peers. For example, a college freshman can find out how much others with a similar background are spending on entertainment, investments and rent. Questions users can ask include, for example, “How much are people my age investing? Do my classmates have pocket money?”
“I think one of the things that really sets Gen Z apart from other generations is that they want to talk more about money,” Kauloff says. “They want to be open and honest about the realities of what's really going on: how much people are actually spending, what people's credit scores are, how much they're spending on a first date.”
And for those looking for help improving their situation, Frich is ready to take the data it collects from its users and connect them with relevant financial brands.
“Flitch operates primarily as a community-driven money app,” Medina said, “and our personalized approach is really aimed at addressing the industry's oversight of Gen Z so we can leverage our understanding of user data to match them with the right brands and services.” She added that the goal is to anticipate their needs before they even arise.
Image credit: Fritsch
The duo launched the app in the summer of 2021 and has since grown it to more than 100,000 Gen Z users nationwide, with New York, Florida and Texas as key markets. Fritch is approaching $1 million in annual recurring revenue (ARR) with a B2B subscription model.
Frich makes money by partnering with brands, such as banks, credit builders and lifestyle brands, and charging them a flat fee for joining the platform, with fees varying depending on the partner.
Interestingly, the company has not only promoted its app on digital platforms like TikTok, but has also adopted old-school marketing techniques by visiting campuses across the country and using ambassadors to promote its services.
Today, the six-person startup announced that Frich has raised $2.8 million in a seed funding round led by Restive Ventures, with participation from TruStage, K20 and Spartan Innovations. Some of the funding so far has been used to hire key talent, including a former Bumble employee to lead growth and an early Robinhood employee to work on product development.
Cameron Peake, a partner at Restive Ventures, told TechCrunch that he believes Fritch has a “really good understanding of how Gen Z thinks and behaves around money” and has the potential to be a “huge” company.
“For example, they're doing regular polls to shed light on those issues, which we're really excited about,” Peake added. “The consumer market is so broad, they're able to grow very quickly.”
Of course, Fritsch isn't the only fintech company looking to serve the expanding Gen Z market. In January, Alinea Invest, a fintech app offering AI-powered wealth management targeted at Gen Z women, raised $3.4 million in seed funding ahead of the release of a virtual AI assistant to help users with their investment needs. And Bloom, a fee-free stock investing tool aimed at teenage investors, came out of stealth last July and announced it had achieved 1 million downloads after its February 2022 launch. Meanwhile, in March, Onyx Private, a Y Combinator-backed Miami-based digital bank that offered banking and investment services to high-income millennials and Gen Z, announced it would shut down its banking operations and pivot to a B2B model instead.
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