:max_bytes(150000):strip_icc():format(jpeg)/95528215-5bfc2b66c9e77c005143ea37.jpg)
Splitwise is a free app that allows consumers to split expenses with friends. If a group needs to share the cost of a particular bill, Splitwise ensures that anyone who pays is reimbursed the correct amount and with a minimal number of transactions. With Splitwise, users can send an email notification when a bill is due, and the app allows users to send an IOU to someone else in the group.
The app is marketed to keep track of informal debts, including the cost of rent, dining and travel expenses, bills, and more. Users of Splitwise enter notes into the app about who they owe, who owes them, and why. This service eliminates the need to keep receipts because a user can add any expense to the app when the cost is incurred.
With Splitwise, users can make payments via online payment services Paypal and Venmo, which may charge fees. Splitwise also offers Splitwise Pay for direct payments from the app through a connected checking account; however, you have to be granted access to use the option.
Splitwise Pro is a paid upgrade to existing Splitwise accounts, available for a variable monthly or annual rate depending upon a variety of factors. The price ranges from $0.99 – $39.99 per item. Pro users see reduced advertisements, a receipt scanning and itemization service, currency conversion, expense search, early access to new features, and more.
Key Takeaways
- Splitwise is a free app allowing users to quickly and easily calculate and pay each other back for informal debts like bills, shared meals, and travel.
- The company primarily earns revenue through the potential use of advertisements and its paid subscription service, Splitwise Pro, which offers added functionality.
- Splitwise integrates with Venmo and Paypal for payments, which is subject to third-party transfer fees; it also offers Splitwise Pay for direct payments through a linked checking account but users must be granted access to use the feature.
- In April 2021, Splitwise received $20 million in funding from the private equity firm Insight Partners.
Splitwise’s Industry
Splitwise is used via a mobile app and web platform that uses fintech software. This thriving industry offers users technology to help them enhance or automate financial transactions.
A bill-splitting app, it operates in the same realm as its competitors like Tab, Settle Up, and Splid, which all offer similar services that provide easy ways to split up bills and pay debts within groups. Splitwise, via Venmo or Paypal, allows users to jettison paper money in favor of digital transactions.
The global fintech industry has a long reach. According to DemandSage,46% of consumers had adopted a form of fintech into their lives by 2024.
Fundraising and Financials
Public data regarding the company’s user base is unavailable. Still, Splitwise has generated more than $30 million in investor funding over six rounds since its founding in 2011, suggesting outside interest in supporting the company’s growth. In the last round of funding in April 2021, according to Crunchbase, the company raised $20 million.
Splitwise does not make money off transaction fees paid by the user to facilitate payment transfers via PayPal or Venmo. Instead, the app makes money off the Pro service. This way, Splitwise can keep its service free to the user—even if payments themselves incur separate third party fees to settle up debts owed.
The cloud-based Splitwise app is available for iPhones, Android devices, and computers. Splitwise as a free limited app makes money through occasional advertisements. Its paid subscription upgrade service, called Splitwise Pro, is ad-free and unlocks advanced features.
Although company documentation suggests that users of Splitwise’s free service may experience advertisements, in reality, ads seem to appear sparingly, if at all. Because the company does not provide public financials, it is difficult to assess if Splitwise earns significant revenue from advertisements and, if so, what these figures may be.
Fast Fact
Plates by Splitwise is a separate free app offered through Splitwise that simplifies the process of splitting up a restaurant bill. This app allows diners to enter each dish ordered and split the cost of shared items, such as appetizers. The Plates app calculates the tax and tip, and each person in the group receives an email notification of the amount owed. This service can also link with the Splitwise app.
Splitwise History
The Providence, Rhode Island-based company was founded by Jonathan Bittner, Marshall Weir, and Ryan Laughlin, who handles the web design and development, in 2011. According to his bio, Bittner, a former astrophysics graduate student at Harvard, was interested in creating an app to assist quantitative fairness.
The company aims to provide “mediation advice about fairness.” While the backstory isn’t on the website, users can search through the archives of the company’s blog posts back to 2011 to understand how they operate and create. As a free app, Splitwise does not charge users to download or utilize basic limited service and offers a paid service called Splitwise Pro.
In 2019, the company refreshed and redesigned its entire platform, including the homepage, logo, and mobile app.
Important
Company documentation suggests that users may see advertisements in the course of utilizing Splitwise, providing one source of revenue for the company.
Recent Developments
In April 2021, Splitwise Inc. announced they had raised $20 million in Series A funding led by global venture capital and private equity firm Insight Partners. According to a company-approved press release, Splitwise will “use the funding to grow its team, accelerate global customer growth, and create new partnerships with fintech and financial services platforms.”
Since its inception, $90 billion in total transactions have been split on the Splitwise platform, and in April 2021, Splitwise launched a significant refresh of its Android app.
The Bottom Line
The last round of funding for Splitwise indicated a continued demand by consumers for fintech applications. Splitwise does not provide exact metrics on its active users, but with an app that helps groups of friends and family keep track of money owed, it will most likely continue to be in demand.
How Do You Use Splitwise?
You can use the Splitwise mobile app on your phone. It acts as a digital IOU, and easily calculates what each person in a group owes. You can also make payments using third-party apps like Venmo or PayPal.
How Much Does Splitwise Cost?
Splitwise is free for limited use but you can sign up for Splitwise Pro for a monthly or annual subscription. The price may vary based on multiple, determining variables.
Is Splitwise Linked to a Bank Account?
You cannot link Splitwise to a bank account as it does not support cash transactions. Splitwise only keeps track of expenditures and IOU debts.
What Is the Splitwise Calculator?
Splitwise offers a range of fairness calculators on its website from a calculator for splitting the rent to a travel calculator.
Is Splitwise Safe?
Splitwise does not handle any cash transactions, nor does it link to personal banking details, making it safer than other apps.
What Are Alternatives to Splitwise?
SettleUp, Tab, and Splid are all similar to Splitwise.
