Jesse Chor grew up going with his grandfather and uncles to Montreal’s Chinatown to participate in their tanda group. It is an informal peer-to-peer savings and lending network within a community of family, neighbors and friends.
concept, Largely rooted in Mexican culture, has been around for centuries. Chor asked his grandfather why he used tanda, and his response was that as an immigrant, he lacked access to traditional banking, loans and credit. Chor told TechCrunch that Altanda supported his grandfather and others with everything from unexpected expenses to starting their own businesses.
The memories stuck with him as he entered the world of work, and while working at Yahoo (full disclosure: TechCrunch’s parent company), he was tasked with building a version of Tanda in 2018. However, what caught Chor’s attention was that he could have used something like this when he was He works in minimum wage jobs.
“Not only that, but I feel like everyone I worked with in those places could have done it too,” Chor said. “It’s really the idea of helping the community support each other, empower each other, and lift each other up while making it easier to access funds.”
Adapt the approach for small businesses
Yahoo’s Tanda product fizzled out after about six months, according to Chor, and he left Yahoo in 2019 to start his own company. After two companies, he continued to think about the idea. When he learned of the widely known statistic that the majority of Americans would have difficulty dealing with an unexpected $400 expense, he knew what his third business should be.
He began TandaIt is the platform he is building that provides financial flexibility and community connections through collective savings. Tanda uses the rotating savings and credit association model and goes one step further to offer the service to small businesses as a way to retain employees, reduce employee turnover, and reduce burnout.
“We partner with small business owners and they offer it as a benefit to employees,” Chor said. “There’s already a little culture, if you will, so we’re able to communicate with each other better.”
How it works
In traditional tanda, one person takes the lead in raising money and maintaining a ledger system for lending that money. Chor’s approach is to leverage technology to take on this task.
Commercial customers advertise Tanda with employees, who scan a QR code and receive the product for free. Instead of variable dollar amounts, they are fixed increments, and users can start with $100 and borrow up to $2,500.
Tanda then charges fees based on the payment position within a circle of people. For example, those who are first or second in receiving a return will have their fees assessed at around 10% or 8%. Those in the middle will be free or may receive a reward, Chor said. It’s also getting interest from employers who want to sponsor the product so the fees are covered.
“One of the secrets of tandas is that, historically, default rates are very low, around less than 2%,” Chor said. “It’s because of the community, camaraderie among adults and social accountability.”
Next steps
Tanda is still in its early stages, working with a small group of restaurants and running a few hundred thousand dollars, while building its waiting list.
Meanwhile, the company closed $4.5 million in seed capital from Initialized Capital and Arc, Sequoia Capital’s pre-seed and seed stage catalyst. Chor intends to use the funding to expand the business and hire additional employees.
“We want to help employers offer something more than just money, but how to build community and trust within the team so they can deliver better,” Chor said. “For us, this is really the next step – unleashing this capability within our product.”