Startup Spotlight #201: Chloe
Accessing your home equity should be simple. With Chloe, you can be approved in minutes.
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I got the chance to speak with Eyal Cohen, co-founder and CEO of Chloe, about what he’s working on at his startup, and any advice he has for emerging entrepreneurs.
Eyal Cohen is the Co-Founder & CEO of Chloe. After his father passed away from Stage 4 Lung Cancer when he was 20 years old, he dropped out of college and eventually got into sales, where he quickly outperformed 180 seasoned sales reps and had a taste for success. After that role, he co-founded a MarTech SaaS solution for Real Estate professionals called Zentap and bootstrapped it to 5mm ARR. This accolade led to getting placed on the Forbes 30U30 list.
Startup Spotlight: Chloe
Problem: The Home Equity Line of Credit (HELOC) is a legacy financial product (offered primarily by legacy banking institutions) that entails antiquated underwriting processes and significant transactional friction. Homeowners have very limited understanding of how to access their home equity, with many not knowing that the option even exists (despite it being one of their largest assets).
Market: There are over 120m homeowners in the United States that are sitting on a record amount of untapped home equity (over $11 trillion), with the average homeowner having roughly $150k of equity in their home.
Solution: Chloe’s technology solution will underwrite and provide credit decisions to applicants in minutes, compared to the 45 day timeline offered by banks, while distributing the line of credit via a credit card solution, making it significantly more efficient to transact with while also enabling homeowners to receive the benefits of credit cards.
Team: Chloe has three co-founders: Eyal Cohen, Ben Guez, Aaron Murphy. Between the three of us, we have deep expertise in real estate, sales, marketing, and capital markets which are core to growing Chloe.
Recent Success:
Cohen: We have made strong progress in establishing key partnerships needed for the various aspects of our business. Some of these partnerships include: Banking/BIN sponsorship, card network and processing, expert compliance management team and system, mortgage loan origination licensing, and servicing and capital markets. The partnerships will enable Chloe to grow efficiently and offer excellent customer experience and additional product offerings to members.
In addition to establishing relationships with these large partners, we have established strong customer acquisition channels which include: 1) a direct-to-consumer approach which includes launching a waitlist and building an educational platform (differentiating chloe and supplementing traditional customer acquisition approaches such as mailers and ads); and 2) a B2B2C approach where we leverage our network of real estate agents to reach homeowners.
For our direct-to-consumer approach, we have already launched some ads to generate sign up to our waitlist and have seen strong results. For our B2B2C approach, we have already engaged numerous real estate agents in our network (Zentap created content utilized by thousands of real estate agents, thus we have a strong network to immediately tap into) who are ready to leverage Chloe as a tool to add value to their clients.
Further, we have built strong relationships with capital markets, loan servicers, and have developed our underwriting models. We will have considerable capital in-place to originate to our members for their loan needs when we get to market.
Recent Struggle:
Cohen: One of the greatest challenges we have faced is managing our capital raise process while establishing the myriad partnerships (mentioned above) that we will need in place to have all aspects of the business in-synch at the same time (getting all pieces across the finish line at once). This includes our card network and processing buildout, technology, capital markets, and customer acquisition.
One particular challenge has been on the technology front – we have been actively recruiting developers and potential CTOs; the challenge has been finding technology leadership that understands lending, consumer-facing fintech applications, and credit card payments, and that also has the leadership skills required to build a team from the ground up. The integration of all these pieces remains a key focal area. We also need to ensure that we balance all pieces of the business while still offering a seamless consumer experience and easy-to-use app.
Founder Advice:
Cohen: We believe strongly in the need for Chloe’s product to exist in the market. We believe we can truly make a difference in the lives of our members and improve their financial well-being in numerous ways. Our advice to founders is to truly believe in the product you are building -- it makes the process of building more fun and it enhances creativity and innovation. Finding co-founders and early employees who share your vision, and believe in the ultimate impact of the company, is critical.
As we have seen recently in the venture capital market, there are ups and downs in terms of market conditions and what is considered “in favor” by investors. It's paramount to recruit a team that will be with you throughout the cyclicality of the broader market, and will be driven more by purpose than by anything else.
Three Cool Founders You Should Know About:
Cohen: Here are three founders you should check out next!
Ajay Yadav, Founder of Simplified: Simplified is a design and collaboration platform for modern marketing teams.
Cristina De La Pena, Founder of Synapbox: Synapbox helps brands and creators access automated consumer feedback to improve content creation and predict performance.
Evan Zimmerman, Founder of Drift Biotechnologies: Drift Biotechnologies makes bioinformatics software for infectious disease sequencing.
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