Oxygen, a banking startup geared toward freelance workers, launched out of beta today despite the current uncertainty facing gig economy workers. In fact, the company views its product as more useful than ever, in light of the coronavirus pandemic. 

“[Companies] are going to hire more contractors to get things done on an as-needed basis instead of bringing someone in full time. You’re going to end up with a lot of freelancers and SMBs,” said Hussein Ahmed, founder and CEO of Oxygen. “All these people that are laid off are now going to start contracting for design, development, marketing, lead generation and sales.”  

Ahmed added that, despite many consumers being forced into contract work, they will end up enjoying the associated freedom and control. The COVID-19 pandemic will impact the workforce in the long term, and Oxygen can gain the business of workers fleeing the 9-to5 office life, according to the company.  

The San Francisco-based Oxygen offers many features common among banking startups, including early pay, cashback rewards, and integrations with accounting software for business owners. According to the company, its differentiator is offering both a business account and a personal account on the same platform, which gives it a full picture of the customer that helps with taxes. “If you’re comingling your business and personal funds, you’re probably not taking advantage of some deductions,” said Ryan Conway, head of business development and strategic partnerships at Oxygen.  

Regardless of offerings, the company must still contend with the fact that freelance workers are suffering due to the pandemic. According to a recent survey of 1,400 gig workers from AppJobs, more than half lost their jobs since the pandemic began, and almost 70% have no income.  

“It’s hard to imagine a de novo business sprouting in the current environment,” said Alenka Grealish, senior analyst of corporate banking at Celent. “Under today’s worst of circumstances, it requires not only capital but an investor or lender willing to take high risk. It is hard to imagine there are many high-risk takers, given the great economic and health uncertainty generated by the pandemic.” 

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Oxygen has raised $8 million since its 2017 founding, according to the company, and it joined Visa’s Fast Track program to help it scale. Its partner bank is The Bancorp Bank, based in Wilmington, Del. The startup makes money through interchange fees, and plans to launch lines of credit in the future, which will also benefit from the full view of customers’ finances offered through a business and personal account. It is also considering a subscription model.  

Oxygen soft-launched its banking product in 2018, and Ahmed said the company has recently been gaining around 300 new accounts each day and “millions” in deposits every month. According to Ahmed, Oxygen pulled back on paid acquisition since the start of the pandemic and still saw 90% growth in revenue in April. Oxygen believes its fully digital platform gives it a leg up over incumbent banks that rely on physical branches. 

“Think about Chase and Wells. The unfair advantage they have is the prohibitively expensive real estate on every block,” Ahmed said. “All these branches overnight became completely unusable. Those [banks] now are trying to catch up quickly.”