May 11, 2022 · 24m · top-founders
Fintech For Gig Workers Breaks $1m ARR, 10k Customers
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Conversations with Nathan Latka, SteadyPay co-founder Oleg Mukhanov details how the UK fintech reached $1 million ARR and 10,000 subscribers by providing subscription-based income smoothing and automated Open Banking credit to gig economy workers.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 42.8% of the talking time here. How this is scored →
Nathan as informed peer 5.4 Guest teaching 3.6 Guest disagreement 2.0 Nathan pushing back 4.0
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 17:15 Oleg Rejects Latka's High Default Assessment
Oleg firmly pushes back against Latka's critique of their sub-10% default rate, correcting the premise by explaining how gig worker volatility and subscription retention alter loss calculations.
Hardest push from Nathan ▶ 17:05 Latka Challenges Vintage Default RateLatka refuses to accept a sub-10% default rate as benign, asserting that top fintech lending benchmarks require a vintage default rate under 3%.
Biggest teaching moment ▶ 17:15 Explaining Default versus Total Loss in Subscription CreditOleg educates Latka on how subscription-backed credit enables defaulted borrowers to cure balances over time, bringing true net loss back down to 3%.
Nathan holds their own ▶ 10:45 Latka Reverse-Engineers Implicit APRLatka calculates on the fly that a 60-pound fee across a three-month repayment on a 1000-pound advance produces an annualized interest rate of over 20%, forcing Oleg to concede the math.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Salary as a Service for Gig Workers | 5 | 4 | 2 | 3 | Latka explores the core business concept by framing it as BNPL for payroll. Oleg reframes it as 'Salary as a Service' and explains how open banking enables real-time income calculation and fast underwriting. | |
| Default Exposure and Subscription Pricing Architecture | 5 | 3 | 2 | 4 | Latka pushes on how SteadyPay handles permanently declining incomes where users never recover to repay advances. Oleg explains that membership fees and machine learning underwriting mitigate default risk. | |
| Breaking $1M ARR, Customer Growth, and Valuation | 8 | 4 | 2 | 6 | Latka demonstrates deep fintech financial fluency by reverse-engineering SteadyPay's fee structure into an effective 20.8% APR based on their repayment windows, which Oleg confirms. | |
| Sponsor Message: Flatfile Enterprise Data Onboarding | 7 | 3 | 2 | 4 | Following a sponsor read, Latka analyzes warehouse facilities, warrant coverage, and capital spreads between debt costs and lending returns, showing strong familiarity with balance sheet lending mechanics. | |
| Managing Interest Rate Risk and Default Recoveries | 7 | 7 | 4 | 7 | Latka challenges Oleg's sub-10% default rate as excessively high for fintech. Oleg schools Latka on the difference between technical default and actual net loss rates under a recurring subscription model. | |
| Multi-Account Underwriting and Anti-Fraud Requirements | 7 | 6 | 3 | 6 | Latka questions how SteadyPay defends against multi-app stacking fraud and the threat of platforms like Uber embedding finance internally. Oleg details bank outgoing visibility rules and employer PR risks. | |
| Market Sizing and Workforce Expansion Potential | 4 | 2 | 1 | 2 | Oleg shares favorable CAC and LTV metrics and outlines their TAM across gig and hourly workers before transitioning into the standard Famous Five closing questions. | |
| Episode Recap and SteadyPay Growth Summary | 0 | 0 | 0 | 0 | Solo host outro summarizing SteadyPay's ARR, valuation, seed funding round, and debt spread economics. |
Statements from this episode (17)
Half the global workforce lacks a fixed paycheck, claims Mukhanov
“So effectively what's tackling is that about 50% of workforce globally do not have fixed paycheck, meaning that some months, weeks or fortnights they earn above average.”
SteadyPay smooths income using a membership fee instead of interest
“So what we do, we automatically provide them the shortfall if they earn below average and they repay us when they earn above average. So effectively we convert a regular pay to a fixed salary and we do not charge interest. We just charge membership fee.”
SteadyPay's gig worker users average £2,000 in monthly net income
“So we're talking about 2000 pounds, call it 2.5 thousand dollars net into your bank account after taxes.”
SteadyPay caps its income top-up advances at £1,000 per customer
“So we're aiming for about 1000 pounds per customer limit.”
SteadyPay's flagship membership costs £16 per month for income smoothing
“So membership fee depends on the tier of the product, but for our flagship product, it's four pounds per week or 16 pounds per month, give or take.”
SteadyPay raised £5M Series A after early equity and debt rounds
“Then at the end of 19, we raised just over one million pounds of equity and 1.5 million of debt to actually provide lending to our customers. And then we just closed couple months ago, our series A with another five million.”
SteadyPay reached 10,000 customers by May 2022
“So currently, as of today, we have 10,000 customers on our platform.”
SteadyPay hit breakeven profitability upon reaching $1M in annual recurring revenue
“And managed to do it actually in a cost efficient manner. So not only we grew to 1000 to one million annual recurring revenue, we actually broke even at that stage, which is quite exciting.”
SteadyPay's membership fee translates to a 20.8% effective annual interest rate
“So our annual interest is at 20.8%.”
Mukhanov: Lower-income gig workers intentionally ignore or misunderstand interest rates
“If you look at the majority of customers in this income bracket, the level of financial sophistication is not that great. And people genuinely either do not understand interest or intentionally do not want to understand how it works.”
SteadyPay has advanced nearly $3M in total cumulative loans
“Well, actually, if I convert into dollars, we're talking closer to three million dollars of loans advanced over that period of time.”
Early-stage fintech debt is expensive; economics work at $5M+ facility scale
“But if you actually look at it, that's the most expensive pricing you will ever pay and you pay just to do the proof of concept. Because if you actually look at the warehouse facility at the good size, call it five million plus, you're probably looking at high…”
SteadyPay maintains a 3% loss rate through friendly repayment nurturing
“So actually taking approach more of being friendly, nurturing and getting customers back on track in terms of total loss, actually it's getting close to like three percent, which you're talking about.”
SteadyPay requires 70% expenditure visibility across bank accounts for loan approval
“So we require a couple, we require quite a lot of things on the backhand, but the most important one, we need to be connected to the account where they're getting their main income and across this account or several accounts, because we have functionality to c…”
SteadyPay clusters B2C users around specific employers to pitch B2B partnerships
“We use direct marketing to generate the critical mass enough to be noticeable and have those specific groups clustered around specific employers and then go directly to employers to capture the residual employment base through the partnership angle.”
Gig platforms outsource embedded credit to avoid debt bondage reputational risk
“At the end of the day, it's still quite heavily regulated in consumer credit business, meaning the barriers for entry are quite high and you do carry underwriting and default risk, meaning that you need to have a proper treasury collection and credit risk func…”