# Relief Financial Model

Mobile app that guides Americans through debt settlement via AI-driven negotiation with creditors, charging a success fee.

- Canonical: https://finamodel.com/startups/relief
- Excel download: https://finamodel.com/startup-models/relief.xlsx
- Category: Fintech
- Model type: Marketplace / GMV
- Funding round: Seed
- Funding: $2M
- Founded: 2021
- Geography: United States.
- Customer: B2B2C

## About the company

Relief is a mobile app that helps Americans settle debt through AI-driven creditor negotiation. It positions the service as free to the consumer, earning a success fee only when a debt settlement is completed.

The documented economics are simple: the average settlement is $7,492 and the service earns 10%, or about $749 per resolved customer, paid by the creditor. The business therefore depends on enrolment quality and successful resolution, not subscription retention.

The model should forecast enrolled clients, creditor acceptance, settlement rate, average debt settled, and the 10% success fee. Customer acquisition cost, negotiation capacity, time from enrolment to settlement, and credit or compliance costs should be tracked to show cash conversion and unit economics.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

- Mobile app that assesses user finances and personal goals, then presents personalized debt-relief options (fast payoff vs. manageable payments).
- Relief negotiates with creditors on the user's behalf; shows negotiated offers transparently before the user commits.
- User pays into an escrow account while Relief negotiates; fee charged only on successful settlement.
- Educational content included; free materials and guidance throughout the process.
- Long-term vision: expand into credit score monitoring, debt consolidation, loan refinancing, and personal lending as a broader personal finance gateway.

## Market

- TAM: $2.78 trillion - US consumer debt excl. mortgages, auto loans, HELOC (2019).
- SAM: $695 billion - US consumer debt expected to default or enter collections.
- SOM: $6.7 billion - amount currently enrolled in debt settlement programs.
- Context: 1 in 3 Americans have an account in collections; average personal debt $29,000 excl. mortgages (2019, Experian); projected to hit record highs in 2020.

## Revenue model

- Single revenue line: success fee charged to creditor upon completed debt settlement.
- Average settlement amount per person: $7,492 (2019).
- Service fee rate: 10% of settlement amount.
- Average fee per resolved client: $749.
- Fee is paid by the creditor (debt holder), not the consumer - positions Relief as free to the end user.
- No subscription or monthly fee mentioned in deck.

## Traction & metrics

- No live revenue or active user numbers disclosed.
- Beta user reach cited as pipeline, not current customers:
  - 2.5M Bloom Acquisition debt holders (creditor partner).
  - 2.7M combined mailing list (Alley + Colors Worldwide).
- App is pre-launch / pilot stage based on context (raising seed round to reach profitability in 12 months).

## Unit economics

- Average revenue per settled account: $749.
- Average debt per settled account: $7,492.
- Take rate: 10% of settlement value.

## Competition / moat

- Named competitors: TrueAccord, Resolve, Tally.
- Relief differentiates on: mobile-first UX, full transparency (shows negotiated offers), open to any credit score, AI-driven settlement negotiation, community-based gifting program.
- Analogizes itself to Robinhood (brokerage), Earnin (payday loans), Credit Karma (credit monitoring) as a category-defining app in debt.
- Industry problem: incumbents have poor reputations, call-center-heavy sales tactics, fraud allegations (Freedom Debt Relief $25M FTC settlement cited).
- Creditor partnership (Bloom Acquisitions) provides proprietary deal flow for pilot.

## Team & funding ask / use of funds

- Jason Saltzman - CEO.
- Ram Berrouet - COO.
- Bryan Okeke - CTO.
- Chris Thomas - Creative Director.
- Finlay Kersaint - Finance.
- Advisors: Jeffery Hartman (Bloom Acquisitions), Jeffrey D. Silberman & Maria Earley (ReedSmith - Legal & Compliance).
- Headline claim: "20+ years of debt and development experience".
- Ask: $1.7M via convertible note.
- Use of funds: support operations through 12 months and reach profitability.

## Recommended financial model

- **Archetype + why:** Transaction-volume / marketplace fee model. Relief earns a per-settlement success fee; the correct model structure is: enrolled clients → settled clients (settlement rate) × avg. settlement amount × 10% take rate = revenue. This mirrors a marketplace / debt-settlement agency model, not SaaS (no subscription) and not a 3-statement manufacturing P&L. A simplified single-entity P&L with volume build-out is appropriate.

- **Forecast horizon & granularity:** Monthly for Year 1 (2021, pilot/ramp), then quarterly for Years 2–4 (2022–2024) to match the deck's stated projection window.

- **Key drivers & assumptions:**

| Driver | Value / Basis |
| -- | -- |
| Avg. settlement amount per client | $7,492 |
| Take rate (service fee) | 10% |
| Avg. revenue per settlement | $749 |
| Total addressable enrolled pipeline (pilots) | 5.2M (2.5M Bloom + 2.7M mailing list) |
| Settlement conversion rate (enrolled → settled) | 5–10%; industry benchmark; not in deck |
| Monthly new client enrollments | Ramp from ~500/mo in Q1 2021 to scale, reverse-engineered from ~$30–40M revenue target by EOY 2022 |
| Avg. time from enrollment to settlement | 12–24 months; typical for debt settlement programs |
| Revenue recognition timing | Recognized at settlement completion, not at enrollment |
| CAC - digital/influencer channel | $50–$150/user; no data in deck |
| Gross margin | 60–70%; success-fee businesses are high-margin; ops costs (negotiators, tech, compliance) not disclosed |
| Headcount / opex | Seed-stage; ~10–20 FTEs; $1.7M raise implies ~12 months of burn |
| Monthly burn rate | ~$140K/mo ($1.7M ÷ 12 months) |

- **Scenarios (Base / Bull / Bear):**
  - Flex variables: enrollment ramp rate, settlement conversion rate, take rate, CAC.
  - Bear: slow creditor partner onboarding, 3% settlement rate, higher CAC.
  - Base: 5–7% settlement rate, 10% take rate, steady ramp via Bloom partnership.
  - Bull: 10%+ settlement rate, additional creditor partnerships, faster user adoption from mailing lists.

- **Required sheets / outputs:**
  1. Assumptions - all drivers listed above with toggles for scenarios.
  2. Volume Build - monthly: new enrollments, active pipeline (enrolled not yet settled), settlements completed.
  3. Revenue - settlements × avg. fee; monthly/quarterly revenue.
  4. P&L - revenue, COGS (negotiation ops, compliance), gross profit, OpEx (tech, marketing, G&A), EBITDA.
  5. Cash Flow & Runway - starting from $1.7M raise, monthly burn, cash balance, months to profitability.
  6. Market Penetration - SAM ($695B) → enrolled → settled; shows % capture to sanity-check revenue projections.
  7. Projected Revenue summary chart (2021–2024, matches deck slide 13).

## Frequently asked questions

### Is the Relief financial model free?

Yes. The Relief model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.