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Business Operations Business Models

How Does Earnin Make Money (Business and Revenue Model)

The Earnin business model

How Does Earnin Make Money?
Here’s what you should know:
  • What is Earnin, and how does Earnin work?
  • How does Earnin make money?
  • Receiving Tips
  • Earnin’s Subsidiaries, Acquisitions, and Exits
  • Earnin’s profit and revenue
  • What is the Earnin business and revenue model?
  • Earnin’s funding and valuation

How does Earnin make money if their loans are free of interest and fees? Here is a full, in depth, breakdown of their main revenue stream and services they offer, as well as the Earnin business model, their year over year revenue, and how Earnin works.

What is Earnin, and how does Earnin work?

Earnin is a financial services company, similar to a payday lender, that charges no interest or fees on the loans they pay out to users as a cash advance backed up by the users paycheck.

Founded in 2013 by Ram Palaniappan, Earnin has now processed over 125 million transactions (loans) for more than 2.5 million active members using the payday loan service.

How Earnin works is: To use Earnin, users must first download the app, connect their bank account, debit card, and add their employer details.

Once done, new users can instantly cash out up to $100 per paycheck (or up to $500 for active users). Earnin will then deduct the loan amount plus any tip given from the users’ bank once the paycheck clears on payday.

Some of Earnin’s competitors include Dave, MoneyLion, Chime, PayActiv, and other financial companies that offer cash advance services.

Earnin App in Apple App Store | Earnin Business Model | How Does Earnin Make Money? | How Does Earnin Work?
Source: Apple App Store | Earnin

How does Earnin make money?

According to an Earnin press release, the company has processed over 125 million transactions (loans) for more than 2.5 million active members using the payday loan service.

So how does Earnin make money off of all those transactions and active members?

Below is a breakdown of how much money Earnin makes and its revenue model. Including their main revenue stream and how much they charge for their services.

Here is how Earnin makes money (in 2022):

Earnin has a revenue model that makes money in just one (1) way – receiving tips from its users.

#1. Receiving Tips

Earnin makes all of its money by receiving tips from its users.

The way it works is; after a user is done choosing the loan amount they want and taps “Cash Out”, they will then have the option of leaving a tip between $0 to $14 for Earnin. It’s that simple.

How much do you need to tip Earnin?

  • tipping is voluntary ($0 minimum, $14 maximum)
Earnin Tips | Earnin Business Model | How Does Earnin Make Money? | How Does Earnin Work?
Source: Earnin

Note: Earnin does not charge fees, interest, or any hidden costs with their loans and rely solely on tips.

Earnin’s Subsidiaries, Acquisitions, and Exits

To date, Activehours, Inc. (Earnin) has made a total of 1 acquisition.

Earnin Acquisitions business model | Earnin Business Model | How Does Earnin Make Money? | How Does Earnin Work?
Source: Crunchbase | Earnin

Earnin’s profit and revenue

Earnin has not reported any official reports in regards to company earnings.

Note: Because Activehours, Inc. (Earnin) is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Earnin business and revenue model?

Earnin makes money through a few revenue models that they combine within their company, they are:

  • Pay what you want (PWYW) business model
  • Mergers & acquisitions (M&A) business model

Earnin’s funding and valuation

According to Earnin’s Crunchbase profile, Earnin has raised $190.1 million over 4 rounds and has a post-money valuation of $500 million to $1 billion as of December 20, 2018.