As a teenage model, Katrin Kaurov achieved financial independence at an early age. Aleksandra Medina, whom she met at New York University in Abu Dhabi, also learned to manage money early on. As students, they bonded over what they felt was a lack of space for people their age to have open conversations about financial well-being.
So in 2021, they joined forces to launch the business based in New York Frichastartup that goals to serve the financial community for the Gen Z population.
The company’s premise, they say, is that Gen Z is bored with inauthenticity. Unrealistic images of economic success appear throughout social media, making people wonder how they are really doing financially with their peers, Kaurov and Medina say.
“We realized that Gen Z has no idea what to do with money, and we all pretend on social media that we have a life together when in reality we don’t,” Kaurov said in an interview with TechCrunch. “Are they really overdrafted, are they really living a lavish lifestyle? We just felt like there was a really strong disconnect between what was being shown online and what banks and financial institutions actually wanted in offering Gen Z.”
Users of the Frich app – which stands for “Effing Rich” – have the ability to ask anonymous questions on the app to higher understand how others their age are doing financially without feeling competitive. They also can anonymously share financial data to compare their performance with their peers. For example, a college freshman can see what others with a similar background spend on entertainment, investments, and rent. Questions users can ask include: How much do people my age invest? Do my classmates have extras?
“I think one of the things that really sets Gen Z apart from other generations is that Gen Zers want to talk about money more,” Kaurov said. They want to be open and honest about the realities of what is actually going on, like how much people actually spend, what their credit rating is, and what they spend on a first date.
And for those looking for help to improve their situation, Frich is ready to take the data collected from users and connect them with the right financial brands.
“Frich operates primarily as a community-built money app,” Medina said. “Our personalized approach really aims to solve the industry’s oversight of Gen Z. We can then leverage our knowledge of user data and match Gen Zers with the right brands and services.” Her 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, the variety of Gen Z users has grown to over 100,000 nationwide, with New York, Florida and Texas being its primary markets. Frich is approaching $1 million in annual recurring revenue (ARR) on a B2B subscription model.
Frich makes money by partnering with banks and brands, resembling a loan builder or lifestyle brand, and charging them a flat fee to use the platform. This fee varies depending on the partner.
Interestingly, the company has taken an old-school approach to marketing, visiting campuses across the country and using ambassadors to promote its offerings in addition to promoting the app on digital platforms resembling TikTok.
Today, the six-person startup publicizes 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 has been used in part to hire key employees, including a former Bumble worker to lead development and an early Robinhood worker to work on the product.
Cameron Peake, a partner at Restive Ventures, told TechCrunch that her firm believes Frich “really has its finger on the pulse of how Gen Z thinks and acts when it comes to finances” and has the potential to turn into a “huge” company.
“For example, they send out surveys very regularly to clarify some of them and that really excited us,” Peake added. “The consumer market is so broad that it can grow rapidly.”
Of course, Frich is not the only fintech aiming to serve the expansive Gen Z market. In January, Alinea Invest, an AI-powered fintech app offering wealth management aimed at Gen Z women, raised $3.4 million in pre-launch seed funding an AI virtual assistant that can help users meet their investment needs. And Bloom, a zero-commission stock investing tool for teen investors, got here out of hiding last July, announcing that it had reached 1 million downloads after launching in February 2022. Meanwhile, in March, Miami-based Onyx Private, a digital bank backed by Y Combinator that provided banking and investment services to high-earning millennials and Gen Z, announced that it was ending its banking operations and shifting to a B2B model.
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