Tally Technologies, a consumer debt management company, has sold its assets to a digital bank and a fintech two months after it folded.
LendingClub Corporation, the parent company of LendingClub Bank, and Pagaya Technologies announced on Wednesday that they had acquired different parts of the intellectual property developed by Tally. Tally began as a consumer-focused app that let users link credit cards and strategize ways to pay off their credit cards more efficiently and economically. In April, it pivoted to a business-to-business model with the launch of white-labeled credit card debt management software offering the same functionality and planned to sunset its direct-to-consumer product in June.
Both buyers say this acquisition will enhance or build on the products they already offer.
LendingClub is based in San Francisco. The $9.6 billion-asset bank will absorb Tally's direct-to-consumer credit management assets. Scott Sanborn, CEO of LendingClub, said in a press release that several former Tally employees will join the bank.
"LendingClub is committed to building innovative tools and solutions that help our members better manage their debt," he said. "Tally's credit card management platform … will bolster those efforts."
In the fourth quarter of 2023, LendingClub launched the debt monitoring portion of what it calls its debt monitoring and management solution in its app, which it is currently testing with a select group of customers. Tally's capabilities will "accelerate the evolution of LendingClub's member engagement platform," according to the press release.
Pagaya, which is based in New York City and Tel Aviv, Israel, uses artificial intelligence to analyze data points that help banks and fintechs issue loans to borrowers who might otherwise be rejected under their legacy underwriting models. It counts Ally Financial, U.S. Bancorp and Visa among its customers. Leslie Gillin, the company's chief growth officer, was named one of American Banker's most influential women in fintech in 2024.
Pagaya will acquire Tally's B2B credit management side, which it will extend to its lending clients as a white-labeled product to complement its existing suite of white-labeled products, including personal loans and point-of-sale loans.
"Integrating and embedding Tally into our B2B offerings significantly enhances the value we provide to our partners through our suite of cutting-edge products," said Sanjiv Das, president of Pagaya, in the same press release.
In August, Tally founder and CEO Jason Brown posted about his company's closure on LinkedIn.
"After nearly nine years of helping people manage and pay off their credit card debt, we have made the difficult and sad decision to shut down Tally," he wrote. "This was not the outcome we had hoped for, but after exploring all options, we were unable to secure the necessary funding to continue our operations."
In a May story for American Banker, Brown acknowledged the challenges of operating as a direct-to-consumer app as a reason why he wanted to target fintechs, financial institutions and digital commerce sites with Tally's capabilities instead.
"The core experience to consumers has been exceptional and retention is fantastic, but the cost of convincing individual customers to download another app is more than if we partnered with large institutions," said Brown at the time.
