John Keatley, Scratchpay co-founder and chief executive, with Penny. “We recognized that the industry was at this point where people needed a simple and quick way to pay for veterinary care.” “He had had recent experience rescuing a cat who needed a lot of medical care and had experienced how few options there are for people in this stressful time having a sick or injured pet,” Keatley said. They hit on the idea for a pet care financing company “a little bit random(ly),” according to Keatley, following Morse’s ordeal with a sick cat. Keatley said he and Morse reconnected in 2015 without any intention of starting a business. “From my years at Klarna,” Keatley said, “I had knowledge of some new ways of financing and getting people approved that might not necessarily have been approved in older models.” Keatley said the partners’ shared fintech backgrounds - especially his stint as finance chief at Klarna - were key in laying the foundations for Scratchpay’s success. Both continued in finance-centric roles with Keatley joining Swedish fintech company Klarna Bank as its chief financial officer and Morse eventually becoming CFO at South Gate-based home staging company Meridith Baer Home. They built a solid working relationship, according to Keatley, but parted ways after leaving the company. Keatley was Green Dot’s chief financial officer when Morse joined his team fresh out of college. at very different points in their respective careers. The two native Angelenos met at Pasadena-based Green Dot Corp. Scratchpay’s genesis came about in a chance encounter between Keatley and the company’s co-founder and Chief Operations Officer Caleb Morse at the offices of another local fintech pioneer.
“All of these might have seemed insurmountable in the beginning,” Keatley said, “but we just kept moving through from one to the next.” He described significant challenges entering a highly regulated and fragmented market while working to increase consumer comfort with an unfamiliar approach to finance. Despite the company’s recent success, co-founder and Chief Executive John Keatley said reaching this point was anything but a sure thing. It uses machine learning to factor in nontraditional data such as the age of a pet or the operation being performed, which, according to Scratchpay, provides higher rates of loan approval without increasing risk for the lender. The company’s platform offers on-the-spot underwriting and approvals through a mobile application or a point-of-sale system. Founded in 2016 by two financial technology veterans and self-described “pet lovers,” Scratchpay has eked out market share by being one of the only tech-centric players in its space. Its revenue has grown more than 630% over the last three years, from just over $745,000 in 2017 to nearly $5.5 million last year.
The Pasadena-based fintech company provides on-demand financing, primarily for veterinary services. Scratch Financial Inc., better known as Scratchpay, has had breakout success in a remarkably niche business.
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