Miami-born Pigeon Loans joins Y Combinator to grow online peer-to-peer lending platform

When money gets involved in personal relationships, things can go south quickly. At the very least, sharing money with relatives can be awkward. At the worst, money issues can damage relationships.

Software engineer Brian Bristol appreciates the nuances of this problem. During the pandemic, a close family member who was struggling with their finances approached him for a loan. He had no problem sharing a few hundred dollars. But when Bristol went to visit them, the family member asked for a larger amount of money. Bristol, who was 23 at the time at just starting out in his career, didn’t feel comfortable lending such a significant sum.

“I didn’t really have savings, so lending this money would have impacted my life,” Bristol told Refresh Miami. “I wanted to make sure that I would be able to get this money back at some point, but I also wanted to help them out.”

A search for online tools to create a loan between two parties returned no viable options. That’s when this software engineer decided to do what he knows best: dive into the code and build a tool himself.

Over the summer of 2020, Bristol developed the bones of what would become Pigeon Loans, a Y Combinator-backed startup that makes it easy for users to lend each other money. When Bristol launched an initial interaction of the product in September 2020, he described the reception from friends and family as “immense.”

“That made me think about how big the problem is, and how many people were actually suffering from it,” Bristol explained. After a bit of market research, he learned that lending between friends and family in the US was almost a $200 billion market – or $1 trillion globally.

Fast forward to early 2021, and Bristol made his first trip to Miami. Instantly, Bristol and Miami clicked: “I made a ton of great friends – there’s an openness to meet new people here that’s really refreshing.”

One of those key connections was Kaben Clauson. He and Bristol met through the Shrimp Society, a Miami-based community for early-stage entrepreneurs. Eventually, the two would join forces as co-founders, with Clauson as COO and Bristol as CTO. They both moved to Miami in summer 2021, Bristol from San Diego and Clauson from Chicago.

“I was excited about the concept of using a loan to do good in the world,” said Clauson. One popular use case of PL is connecting people in need with users who are able to provide financial support.

Pigeon Loans is taking part in the Winter 2022 batch of Y Combinator, beating out 17,600 other companies from around the world. The startup is taking YC up on their additional $375,000 in funding, announced earlier this year.

“I’d always idealized Y Combinator,” Bristol said. But what really sealed the deal for him was attending a talk run by YC Partner Michael Seibel geared towards Black entrepreneurs and investors

“Before seeing [Seibel] for the first time, I didn’t know he was a Black man,” said Bristol. “I was like, oh wow, the guy who runs YC looks like me. And him saying that these are companies that are trying to change the future. That motivated me to make it a goal to get into YC one day.”

Setting up a loan through Pigeon’s platform is straightforward, taking less than 10 minutes on average. “One of the parties sets the terms, including the interest rate, and sends it to the other party over email,” said Clauson. “It’s a legally binding contract, and the payment reminders are automated,” he noted, emphasizing that this structure helps minimize the awkwardness inherent to lending money to friends and family.

Out of the hundreds of loans already on the platform, Pigeon reports that they are yet to have a single default. Unlike other lenders, Pigeon only charges borrowers a small subscription fee of a few dollars a month.

“We wanted to make it as affordable as possible,” Bristol said.

Photo at top of post: Brian Bristol and Kaben Clauson, co-founders of Pigeon Labs


Riley Kaminer