As a teen model, Katrin Kaurov became financially independent at a young age. Aleksandra Medina, whom she met at NYU Abu Dhabi, also learned to manage money early on. The pair bonded as students over what they viewed as a lack of a space for open conversations for people their age to have around financial wellness.
So they teamed up in 2021 to start New York City-based Frich, a startup that aims to serve as a social financial community for the Gen Z population.
The premise behind the company, they say, is that Gen Z is tired of inauthenticity. Unrealistic portrayals of financial success are displayed all over social media and it leaves people wondering how they truly compare to their peers financially, Kaurov and Medina say.
“We realized that Gen Z has no clue what to do with money and we’re all pretending on social media that we have our lives together, when in reality, we don’t,” Kaurov told TechCrunch in an interview. “Are they actually overdrafting or are they actually living those lavish lives? We just felt there was a really strong disconnect between what’s being shown online, and what the banks and financial institutions are offering with Gen Z actually wants.”
Users of Frich — which stands for “Effing Rich” — have the ability to ask questions anonymously on the app to get a better understanding of how others their age are doing financially without feeling competitive. They can also anonymously share financial data to see how they compare with peers. For example, a college freshman can see what others with similar backgrounds spend on entertainment, investing and rent. Questions users could ask include, for example, How much are people my age investing? Do my classmates have allowances?
“I think one of the things that makes Gen Z really different from any other generation is that Gen Zers want to talk more about money,” Kaurov said.” They want to be open and honest about the realities of what’s actually going on like how much are people actually spending, what are people’s credit scores and what they are spending on the first date.”
And for those seeking help to improve their situation, Frich is ready to take the data collected from users and connect them with relevant financial brands.
“Frich operates mostly primarily as a community-driven money app,” Medina said. “And our personalized approach really aims to address the industry’s oversight of Gen Z. We can then leverage our understanding of the user data and match those Gen Zers with the right brands and services.” Its goal, she added, is to anticipate their needs before they even arise.
The duo launched their app in the summer of 2021 and since then, have grown to over 100,000 Gen Z users nationwide, with primary markets being New York, Florida and Texas. Frich is approaching $1 million in annual recurring revenue (ARR) with a B2B subscription model.
Frich makes money by partnering with banks and brands such as a credit builder or a lifestyle brand, and charging them a flat fee to be on its platform. That fee varies based on the partner.
Interestingly, the company has taken an old-school approach to marketing by visiting campuses nationwide and using ambassadors to tout its offering in addition to promoting the app on digital platforms such as TikTok.
Today, the six-person startup is announcing that Frich has raised $2.8 million in a seed funding round led by Restive Ventures, which included participation from TruStage, K20 and Spartan Innovations. The money so far is being used in part to make key hires, including a former Bumble employee to lead growth and an early Robinhood employee to work in product.
Cameron Peake, partner at Restive Ventures, told TechCrunch that her firm believes Frich “really has their finger on the pulse around how Gen Z thinks and acts related to money matters” and has the potential to become a “massive” company.
“They send out very regular polls, for example, to demystify some of that and that really excited us,” Peake added. “The consumer market is so broad, they can grow quickly.”
Of course, Frich is not the only fintech aiming to serve the expansive Gen Z market. In January, Alinea Invest, a fintech app offering AI-powered wealth management aimed at Gen Z women, raised $3.4 million in seed funding ahead of the launch of a virtual AI assistant that will help users with their investing needs. And Bloom, a zero-commission stock investing tool for teenage investors, emerged from stealth last July, announcing it had reached 1 million downloads after launching in February 2022. Meanwhile in March, Miami-based Onyx Private, a Y Combinator-backed digital bank that provided banking and investment services for high-earning millennials and Gen Zers, announced it was terminating its bank operations and pivoting to a B2B model instead.
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