BillFloat, a service that gives consumers more time to pay their bills, today secured a first round of funding for $4.5 million. The round was led by First Round Capital with notable seed investors Paypal and Venrock also participating.
The company works as a micro-credit provider and lets consumers pay their service bills, including cable, utility, wireless, auto lease, phone, housing and insurance. A user visits BillFloat, selects the service provider and then inputs the amount needed to pay the bill. BillFloat pays the bill and then gives the user 30 days to pay the company back. The company adds a small fee for the added time. For example, an $80 bill may cost an added $9.99 for an extra 30-days.
A quick search turned up both my cable company Comcast and cell phone carrier Verizon Wireless, just two of the available 3,000 service providers offering bill payments through BillFloat.
While the company appears to have no direct competition, one might suggest that a simple credit card would be sufficient in paying ones bills when cash may be low. Banks could also be considered competition as they provide customers with loans to pay their bills as well. Though BillFloat appears to be a less riskier and more convenient method than both scenarios.
New investors include Baseline Ventures, SoftTech VC, SV Angel and Mint.com board member Mark Goines. Funding will be used to expand operations and its product offering.
The San Francisco-based company, founded in 2009, claims it is also available on biller’s websites as well as financial services partners such as pre-paid and debit card insurers, payroll services and walk-in bill payment centers.