Phaedra Ellis-Lamkins has transformed Promise into a financial powerhouse valued at $520 million by focusing on ethically assisting municipalities and utilities in collecting unpaid bills through zero-interest payment plans. Drawing from her own life experiences, Ellis-Lamkins emphasizes the importance of treating financially struggling individuals with respect and dignity. The company’s user-friendly software has significantly improved payment plan enrollments and compliance, notably in locations such as Richmond, Virginia, where unpaid utility bills ballooned during the pandemic. Richmond’s collaboration with Promise saw 11,000 residents sign up for payment plans, with a remarkable 93% adhering to their commitments, demonstrating the effectiveness of Promise’s approach in creating accessible and manageable options for customers.
Prior to establishing Promise, Ellis-Lamkins faced challenges in her professional journey that forged her commitment to social justice initiatives. After experiencing hardships during her upbringing in California, where she relied on welfare, she worked her way up through various roles in community organizing, nonprofits, and the tech space. Her role as CEO of Green for All marked a major shift in her career, where she further engaged in policy and advocacy. Subsequently, her venture into the tech industry culminated in her co-founding Promise, initially aimed at reforming the bail system. However, recognizing the broader implications of her platform, she pivoted towards dealing with unpaid municipal debts, highlighting her adaptability and commitment to solutions that help underprivileged communities.
Promise’s operations present a stark contrast to many fintech companies that offer high-interest loans to distressed consumers. Instead, Promise operates with a model where government entities pay for the service, taking financial pressure off struggling citizens. This innovative structure has led to extraordinary results, with municipalities reporting recovery rates of delinquent accounts exceeding 85%. Investors recognize the potential for sustainable growth in this sector, as evidenced by Promise’s rapid revenue growth, which tripled in a single year to approximately $20 million in 2022, with forecasts for ongoing expansion. The strategy’s success is underscored by the fact that it solves not only financial crises for municipalities but also contributes to enhancing conditions for low-income populations.
The appeal to local governments stems from a historic surge in unpaid bills, exacerbated by the pandemic. As utility debts rose sharply, cities were eager to partner with a solution that effectively addressed growing delinquencies. Louisville, Kentucky, is among the municipalities that sought out Promise’s services, having witnessed its customer delinquencies quadruple during the pandemic. Local utility officials found that traditional payment plans failed to help customers, leading them to embrace Promise’s model. This pivotal moment has positioned Ellis-Lamkins and her team as key players in addressing systemic financial issues within local governments, emphasizing the necessity for innovative, compassionate solutions.
The potential applications for Promise extend far beyond utility services, with prospects in various realms such as parking tickets, tax collections, and verification processes for social assistance programs. The startup is exploring machine learning capabilities to streamline assistance programs, aiming to reduce bureaucratic hurdles for those already receiving government support. As Ellis-Lamkins aspires to broaden Promise’s impact, she envisions providing local governments with the tools to address ongoing problems that have persisted for decades. Her approach reflects a blend of empathy and pragmatism, striving for comprehensive services that can address both community needs and governmental efficiency effectively.
Ellis-Lamkins firmly believes that her motivations to champion justice can coexist with pragmatic business practices. Her experiences and perspective, shaped by her diverse background—ranging from community organizing to the tech industry—allow her to navigate the fine line between profit and purpose. With a focus on justice-oriented business models, Promise is positioned not just as a financial solution but also as a catalyst for substantial societal change. The company exemplifies that ethical practices and financial success can be intertwined, paving the way for a new wave of socially conscious enterprises in the tech space. As they continue to grow, Ellis-Lamkins and her team remain committed to proving that profitability does not have to come at the expense of compassion, showcasing how positive transformations can arise from innovative approaches to age-old problems.
