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Building Debbie: How Rachel and Frida Raised Over $2M for their Debt Management App

Friday, December 29th, 2023

Rachel Lauren and Frida Leibowitz, former college roommates turned business partners, achieved a remarkable feat by raising over $2 million in venture capital. Their business is revolutionizing the way people manage and pay off their debt. With Debbie, Rachel and Frida are gamifying paying off your debt and paying users for doing the “right thing.” They focus on the emotional and psychological factors of debt, as opposed to debt automation. "How She Started" sat down with Rachel to talk about Debbie. Read their case study below to see How Rachel Started.

Our favorite quote

My advice to all female founders is to quickly identify who the bullsh*tters are and not waste time on them.


Funding: Raised Over $2M

Case Study

How She Started: Can you give me a brief overview of Debbie and how you chose the Fintech industry?

Rachel Lauren: Debbie started when my co-founder Frida and I were brainstorming ways to tackle her $15,000 credit card debt. We both studied finance, with Frida ultimately going on to work for Goldman Sachs. It wasn't that she didn't know how interest worked; she just grew up in a home where making the minimum payments was normal. Frida embarked on a personal transformation to escape this cycle, and that's when we realized that debt is a pervasive issue.

Credit card debt is at a record high, and the personal savings rate is at a record low. We knew there was something wrong here, and as we investigated the root cause, we found that while many companies were trying to solve the problem, none were addressing the behavioral and emotional aspects of debt.

We realized that everyone was trying to turn it into a math problem: Debt + Automation = Less Debt. We realized a lot of the reasons why people get into debt are behavioral, and a lot of spending is emotional.

  • Insight: Understanding emotions in your industry can have a profound effect on your solution.

HSS: Can you tell me about customer discovery for Debbie?

RL: During customer discovery, we uncovered a couple of customer segments. We found that many people have income problems, often because they're missing out on opportunities to earn more. I'd ask them, “How many hours are you working a week?” and it was maybe around 20 hours, which means they have time to fill. The second segment is people who have a lot of pride in terms of “I studied this, and I want to do this, I'm not gonna go do X, Y, and Z because that's what I'm good at. It's not what's gonna fulfill me.” Lastly, some people earn enough but can't manage their money properly because they don't know how much they're spending every month. We make micro-decisions daily, and it’s not something that can be automated. You can't automate away spending.

HSS: What are some examples of Debbie’s points of differentiation?

RL: With Debbie, we’re flipping the script on these micro-decisions and rewards. What draws you to the app is “Oh, I get to earn rewards for doing the right thing instead of spending money on my credit cards.” There’s a misnomer that spending more will earn you more, but credit card companies have simply gamified debt. Spending is really the only way that people earn rewards today. Our business helps people be conscious and mindful of what they're doing daily, and we help them understand the ramifications of overspending. I look at my own experiences with my parents. They spent a good chunk of their 401k on my college education. There were colleges I could have gone to that would have given me scholarships, but they wanted me to go to my dream school, and that decision was very emotional.

HSS: Being a founder is risky. What was the moment you knew you needed to quit your job?

RL: Frida and I have different risk tolerances. She is like the crazy adrenaline junkie, who takes risks and lives in the now. She’s the type of person who says, “Why do I need to contribute to a 401k? We’re gonna get rich.” I'm very different. I'm a scaredy cat. I'm very safe and very risk-averse. Initially, I was funding the business from my salary. I funded the costs associated with design, marketing, software development, the website, and building a waitlist. Before we both went full-time, we wanted to show investors an MVP and why we were worth investing in. Frida quit her job to work full-time, which was quite important. I believe if neither of us went full-time, it would have been much harder to secure an investment.

  • Insight: Showing 100% dedication to your business can boost your credibility with potential investors.

HSS: How were you able to raise that money?

RL: Our first check was from Village Global, which is an accelerator. Our next investment was from a venture fund I had been working on, so that was lucky for us but also intimidating. I was worried that if I had pitched them, and they said no, it would have looked really, really bad, and other investors would not have invested. Thankfully, they said “yes.”

HSS: How are you able to get your initial customers?

RL: Our revenue model is similar to Credit Karma's – our app is free for users. The way that we generate revenues is twofold. One is if a financial institution wants to sponsor their customers to use the app, and they receive a co-branded version of the app, and we charge a monthly subscription fee to the lender or the financial institution. The other way that we generate revenue is through affiliate marketing. We work with credit unions to get competitive rates for our users. The union will buy the debt from, for example, a credit card company and charge you a lower percentage for your loan. We charge a fee for each of those conversions.

  • Insight: Research adjacent industries to create your business strategy.

HSS: What's your growth strategy?

RL: We’ve been doing business development with credit unions, and we meet with these credit unions through conferences. They’re very old school and like to meet people in person as opposed to social media or even LinkedIn. We also grow through word of mouth. For the consumer side, we want to build a product that's so good that you want to share it with your friends, even if you're admitting that you're in debt. Around 20% of our signups are through referrals, and we want to continue to see that number climb. We also run marketing campaigns. Our tagline is “Get paid to pay off your debt,” and we run paid marketing. We're also producing content that is centered around the psychology of money. We’re doing a podcast called Money Therapy.

HSS: What are your lessons learned as you look back on the business?

RL: Early-stage businesses should quickly evaluate their hires, set clear metrics and goals, and adopt a "do or die" mindset if someone's performance falls short. In the early stages, everyone must contribute at a high level because people are the most significant cost for startups. I think as you grow, there's more opportunity to train and to give people leeway. Big companies can afford to bring in more junior folks who have less experience. In the early stages, you don’t have those luxuries.

  • Insight: Be intentional when hiring and hold employees to a high standard.

HSS: Do you have any additional advice for female-founded businesses?

RL: Don't stick solely to female funds. We found that many of them were way harsher on us than a regular fund. They also specialized in consumer products or CPG, and they didn't have deep expertise in FinTech. In our experience, female funds focused on investing in female founders who create female-focused products in CPG. That was never something we wanted to do. Frida also noticed that there were many people throughout our journey who told us, “You guys are awesome. We love your passion and your tenacity, and you're going to succeed.” It was almost like a pat on the head. We encountered a lot of virtue signalers who tried to “empower” us with kind words but didn't actually back them up with actions. My advice to all female founders is to quickly identify who the bullsh*tters are and not waste time on them.

  • Insight: Don’t limit yourself to only female-focused funds.

HSS: When was being a female founder an advantage for you?

RL: Being a female founder was an advantage when our target market was women like us. Understanding our users' needs and motivations deeply, from personal experience, gave us an edge in creating a product that truly resonates. This connection with our audience has been invaluable in shaping our product and marketing strategies.

HSS: What is your vision for the future of Debbie?

RL: Our vision for Debbie is to become a leading platform in financial wellness, helping people not just to manage and pay off their debts, but to achieve broader financial literacy and empowerment. We're aiming to expand our offerings, integrate more educational tools, and create a community where users can share experiences and support each other in their financial journeys.

HSS: Any final thoughts or words of wisdom you'd like to share?

RL: My advice to aspiring entrepreneurs is to be resilient and adaptable. The journey of building a startup is filled with challenges and unexpected turns. Stay focused on your vision, but be willing to pivot when necessary. Also, remember that building a successful business is a marathon, not a sprint, so take care of your well-being along the way.

HSS: Thank you for taking the time to talk to me!


  • Understanding emotions in your industry can have a profound effect on your solution.
  • Showing 100% dedication to your business can boost your credibility with potential investors.
  • Research adjacent industries to create your business strategy.
  • Be intentional when hiring and hold employees to a high standard.
  • Don’t limit yourself to only female-focused funds.

How We Met: LinkedIn

I messaged Rachel and we set up a call over email.