Done right, financial inclusion shouldn’t just be about making financial tools available to all — we need to ensure that those tools are useful and make a positive impact on customers and their financial health. Building financial health is especially critical as the future of work takes shape, bringing with it both flexibility and uncertainty.
The newest addition to the Accion Venture Lab portfolio, Joust, is a neobank targeting microentrepreneurs, freelancers, and self-employed workers in the United States. It has set out to tackle many of the financial pain points associated with a shifting economy. Joust offers a suite of financial services tailored to the needs of freelancers, including a business bank account, payments processing, and invoice factoring — all in a single mobile app.
I recently sat down with Lamine Zarrad, the co-founder and CEO of Joust, to discuss what he believes is driving the current economic shift, the issues it creates for the self-employed, and Joust’s unique positioning to solve them.
Q: There are over 57 million freelancers in the US, and Freelancer’s Union projects that by 2027 over half of the American workforce will freelance in some capacity. In your eyes, what is driving this shift?
A: There are several factors we believe are driving this shift. First, we believe there is a seismic shift in labor economics, with the paradigm of the corporation eroding through the advent of new technologies. These technologies are giving individuals the ability to engage with parties across the globe. This leads us to point number two — freelancers value flexibility. Seven out of 10 freelancers are interested in moving somewhere other than a large city, allowing them to optimize for cost of living while participating in the work available in a city hub. Finally, self-employed individuals value the work-life balance and job fluidity the type of work often allows.
Q: How do you think this new form of working impacts the way individuals engage with financial institutions?
A: The microbusiness has very similar needs to any other business when it comes to banking. They need access to somewhere they can store funds, the ability to accept payments from clients, and access to liquidity to perpetuate growth. However, because they’re often new, small, and sometimes insignificant to large financial institutions, they struggle to utilize or afford the comprehensive services that are designed for large corporations. As such, freelancers end up piecing together 10 different tools to run their business, while still missing out on some critical financial offerings.
Q: Can you give a brief overview of the product you provide, and which part of that offering you’re most excited to be bringing to market?
A: As a first step, Joust offers a fully functioning business bank account, with streamlined onboarding and no monthly fees or minimum balances. Through the account, users can accept payments and utilize our fully integrated invoicing tool, allowing them to send and accept invoices directly through the app. We are also planning on launching new features later this year based on feedback we’ve received from existing customers.
Last but not least is the PayArmour tool, which we’re especially excited by. PayArmour allows our customers to instantly fund a sent invoice, if they need access to capital, or guarantee invoice payment within 30 days, if they need to manage cash flows. PayArmour is what we believe to be the single most exciting part of our platform and gives us an interesting differentiation from other players in the market.
Q: For this product suite that you’re offering, who is that target customer?
A: When we were building this product, we wanted to help the most vulnerable of this freelancing population. In our eyes, that is not necessarily the individuals who work for a platform, but rather the individuals who are running and managing their own business. Consequently, a lot of the folks in this population fall into the creative side of things —ranging from a marketing consultant to a musician. We work to help our customers feel confident in their operations, and not anxious about the ability to collect.
Q: How is Joust uniquely positioned to address its users’ financial health needs?
A: As mentioned before, freelancers need several tools in order to run their business. They often have a bank account with a traditional provider, a payments product, like PayPal or Stripe, an analytics tool like Mint, a bookkeeping tool like Xero or Quickbooks, an invoicing tool, a timekeeping tool, and more. Joust has consolidated a number of these tools into an “all-in-one” app, designed to solve freelancers’ pain points and simplify their operations.
Additionally, by integrating all of this into a single platform, we can glean into the financial health of our users and create a holistic picture. Consequently, we will have the ability to underwrite our customers in a way traditional institutions cannot. We hope to eventually develop a risk score — imagine FICO for the freelancer — that will allow our users to obtain services they otherwise wouldn’t qualify for.
Q: What are your thoughts on the future of work, both in the US and potentially even globally?
A: It’s most certainly a global phenomenon — the US is not alone. While the US and Western Europe are most similar in their dynamics today, a lot of developing countries’ freelancer populations are also growing. When you look at platforms like Upwork, their users are spread across the globe. Technology continues to bring job opportunities to a lot of new places, spurring freelancing activity.
We’re working with Mastercard Center for Inclusive Growth to bring more small businesses and individuals into the digital economy by partnering with companies in communities around the world to better leverage digital financial tools.