US-based Tally raises USD 80 mln in Series D funding

The funding was led by Sway Ventures with participation from Menora Mivtachim, with previous investors such as Kleiner Perkins, Andreessen Horowitz, Shasta Ventures, and Cowboy Ventures also taking part in this round. The capital will be used by Tally to continue its business growth and expansion of its automated debt pay-down system, aimed at helping members get out of credit card debt, reducing the time it takes people to reach their financial goals.

With over 30% of Americans having interest-bearing credit cards debt, the Fed works to halt inflation. According to a press release by the New York Fed, credit card balances rose by approximately USD 50 billion in the second quarter of 2022, marking an all-time high cumulative increase in more than 20 years.

Tally’s offering includes automated credit card debt payment services. Customers’ financial profiles are analysed to determine the most suitable and efficient way to pay down debt, and eligible consumers are offered a new line of credit at a lower interest rate to support expeditious repayment. To date, Tally has paid over USD 1 billion in credit card debt for its members, saving them million of dollars in interest and late fees.

Household debt and credit in the US

In the second quarter of 2022, total household debt rose USD 312 billion, a 2% increase, reaching a total of USD 16.15 trillion, as per the ‘Quarterly Report on Household Debt and Credit’. Mortgage balances make up the largest component of household debt, having grown USD 207 billion, reaching a total of USD 11.39 trillion as of 30 June 2022, compared to the USD 10.44 trillion four quarters prior.

Home equity lines of credit (HELOC) balances increased by USD 2 billion, and although rather small, the increase follows many years of declining balances. The outstanding HELOC balance stands at USD 319 billion. 

Credit card balances increased an additional USD 46 billion since the first quarter, and although seasonal patterns would typically include an increase in the second quarter, the 13% year-over-year increase marked the largest one in over 20 years. Credit card balances remain, however, slightly below their pre-pandemic levels, following their sharp decline in the first year of the pandemic. 

Following their upward trajectory that has been in place since 2011, auto loan balances increased by USD 33 billion in the second quarter.

Student loan balances remain almost unchanged from the first quarter of 2022, with balances now standing at USD 1.59 trillion. Other balances such as retail cards and other consumer loans increased by USD 25 billion. 

All throughout, non-housing balances grew by USD 103 billion, a 2.4% increase compared to the first quarter, marking thus the largest increase seen since 2016.