Zirtue, a Dallas-based fintech startup, announced an impressive $1 million seed funding round. The app offers a peer-to-peer lending platform, but with a twist. Unlike common options often used for friend and family lending, like Venmo or PayPal, Zirtue adds a layer of accountability to the loan process.

Zirtue’s service creates a more formal payment process for both the lender and the borrower.

The platform works by allowing the borrower to set an amount for the loan, while the lender defines the repayment terms. Once both parties agree, Zirtue services the loan—for a five percent fee—via the Automated Clearing House (ACH) network.

This process allows Zirtue’s fee structure to be more advantageous for the borrower.

Rather than taking on debt through a high-interest credit card or an even more onerous payday loan, the platform provides the lender with a higher level of trust that he or she will be repaid. It’s also an alternative to simply making a friends or family loan on a handshake or makeshift contract—Zirtue gives users repayment terms, a digital promissory note, and automatic bank drafts.

The startup is also in the process of forming partnerships with large corporations to allow for monthly bills or outstanding debts to be repaid through the Zirtue platform as the conduit for a peer-to-peer loan. For example, AT&T, an early Zirtue partner, offers its customers the option to pay a bill via a Zirtue loan.

“Zirtue is not an application searching to solve a new problem. Friends and family lend almost $200 billion annually through various means based on estimates by the Federal Reserve Bank,” Zirtue Co-Founder and CEO Dennis Cail said in a statement. “We are providing anyone who has ever loaned or borrowed money with an option to take the awkwardness out of the situation while building a stronger commitment for repayment.”

Cail, who has a background at IBM, PwC, and the U.S. Navy, founded Zirtue in March 2018 with co-founder Michael Seay, who has a financial executive and entrepreneurial background.

The app is AI-driven and was developed with an emphasis on financial inclusion, user experience, innovation, and platform security. It enters a financial marketplace where 30 percent of Americans take on predatory loans and 20 percent of Americans have no access to traditional funding.

Zirtue is on pace to reach 100,000 registered users by the end of this year with a 50 percent month-over-month user growth rate. The startup is planning a Series A funding round next year.

Updated at 3:44 p.m. on Oct. 14, 2019.

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