James Savoldelli

A watch is worth a credit line, not a fire sale.

Walk into a pawnshop with a gold chain and you walk out with cash and a clock ticking against you. James Savoldelli watched that clock from the other side of the counter. During the pandemic he took a job at the largest pawnshop in Los Angeles, classified as an essential worker, and started noticing a pattern that the industry runs on: people borrowed, repaid, borrowed again, and at the end of all of it owned nothing they didn't start with - least of all a credit history.

That loop is the thing Pesto exists to break. The company he founded issues an asset-backed Mastercard: you send in something valuable - a watch, jewelry, gold - it gets appraised online, shipped through a UPS store to a temperature-controlled vault, and a few days later a credit card shows up tied to that collateral's value. No credit check stands between a borrower and the card. Pay on time and the rate can be 0%; the business makes its money the way every credit card does, on transaction fees, not on the backs of people who can least afford the interest.

The pitch is almost stubbornly simple. Keep what you own, get liquidity against it, and build credit while you spend - then graduate to an unsecured card and get your watch back. For roughly six million underbanked Americans who currently feed a pawn industry that booked more than $9 billion in interest in a single year, that swap is the whole ballgame.

The mechanics matter because they're where most "help the underbanked" pitches quietly fall apart. The card carries an APR up to 29.99%, in line with mainstream secured cards rather than the triple-digit rates that pawn and payday borrowers routinely eat - by Savoldelli's account often around 90% cheaper than an equivalent pawn loan. It's a Mastercard issued by Continental Bank out of Utah, run on the Mastercard network with ITC handling processing. The collateral never gets sold while the borrower is in good standing; it waits in the vault, and the day someone qualifies for an unsecured card, it ships home. The whole arc is engineered so that responsible repayment is the thing that gets rewarded, which is precisely the thing the pawn cycle never did.

An inventor before he was a founder.

The pawnshop wasn't where the inventing started. As a kid in New York, Savoldelli wanted to be three things at once - an inventor, a race car driver, and an astronaut - and managed to keep all three flickering. In seventh grade he and his twin brother Hugh built a contraption to harvest the wind that subway trains push down a tunnel and turn it into electricity. It later picked up a global patent. In high school the same crew worked out a new way to recycle styrofoam and took first place in Intel ISEF's environmental engineering category, publishing the results.

At Stanford he studied Human Biology, not finance - a detail that makes the fintech turn look like a swerve until you notice the through line. He took classes across departments, including BioDesign for Digital Health and Tina Seelig's "Inventing the Future," was named a BioDesign Next Fellow, and kept building things on the side, from an eCommerce site to early product experiments with his longtime collaborator Drew Tomback. He also kept the racing dream alive, karting at a track up in Sonoma when he needed to clear his head. The financial-services idea arrived the way a lot of good ones do: personally. He was offered a high-interest loan as a college student, got curious about who actually relies on credit like that, and spent a sophomore summer researching the underbanked in Midtown Manhattan, where he and his cofounders sized the short-term lending market in the tens of billions and realized one in four U.S. households touches it.

There was a finance detour worth noting, too. In 2019 he spent a summer as an analyst in strategic finance at Cybereason, the cybersecurity firm, where he got a close look at a $200 million capital raise - useful schooling for a founder who would soon be on the other side of the table. Pesto's earliest incarnation even carried a different name, Pawnterra, before it became the cleaner, friendlier Pesto. The ingredients were all there early: an inventor's instinct, a biologist's habit of studying a system before judging it, and a refusal to accept that the way pawn lending had always worked was the way it had to keep working.

Then came the counter job, the cycle he couldn't unsee, and a company. Before the card, before the Series A, there was a Stanford founder cold-calling his way into an industry no one in his world understood - which, by his own account, is underrated.

Eleven million dollars, and a long list of believers.

In May 2023 Pesto did two things on the same day: it switched on the Mastercard and announced an $11 million Series A. The cap table reads like a roll call of fintech-friendly funds - Activant Capital and Plural led the headlines, with Sozo Ventures, Commerce Ventures, NJF Capital, Soma Capital, NOMO Ventures, Human Capital, OVO Fund, OEL Ventures, Core Innovation Capital, Great Oaks VC and Y Combinator filling out the round. For a company that came out of YC's Winter 2021 batch and was still small enough to count its team on two hands, it was a loud vote of confidence in a thesis most investors had never been pitched: that the next great consumer credit product might be hiding inside a pawnshop.

The first markets were Atlanta and Los Angeles - the latter being where Savoldelli had stood behind the counter in the first place. The plan was never to digitize the pawnshop. It was to make the pawnshop unnecessary for anyone with something worth insuring and a willingness to pay a bill on time.