Daily news

Blend Raises $360 Million in IPO; Achieves $4 Billion Valuation

Blend Raises $360 Million in IPO; Achieves $4 Billion Valuation
By David Penn Posted on
Categories: Alumni News, Blend, Daily news, IPO

Mortgagetech innovator Blend is the latest fintech to go public. The company, which unveiled its “data-driven mortgage” solution in its Finovate debut five years ago, made its debut as a publicly traded company on the New York Stock Exchange last week under the ticker BLND. Blend raised $360 million in the IPO, earning a valuation of $4 billion.

In a blog post, Blend CEO and co-founder Nima Ghamsari reflected on the irony of launching a mortgagetech business “out of the ashes of the great recession” in 2012. The goal then was to build a solution that leveraged technology and data to made financial services simpler and more transparent, specifically in the “complex and paper-based” mortgage process. Since then, the company has expanded its product portfolio beyond mortgages to include initially home equity loans and lines of credit, before helping streamline origination workflows for financing products ranging from personal loans and credit cards to deposit accounts. This expansion has allowed Blend to enable its financial institution clients to cross-sell personalized offers and services to their customers and members.

“At every step of our journey, our customers have asked us to build more,” Ghamsari wrote. “That’s why this moment means so much to me and everyone at Blend.

A winner of the NAFCU Services 2021 Innovation Award for Best Digital Lending Platform in June, Blend facilitated more than $1 trillion in loans in 2020, an increase of 2x over the previous year. The company also introduced a variety of new platform features in 2020 including a new loss mitigation workflow for homeowners, and a digital portal to process PPP loans. Blend currently has more than 290 lender partners, representing 30% of all mortgage volume in the U.S.

Headquartered in San Francisco, California, Blend began the year with a $300 million Series G round, featuring participation from Coatue and Tiger Global Management. The funding gave the company a valuation of $3.3 billion. This January investment was less than six months after the company secured a $75 million Series F financing led by Canapi Ventures.

In addition to its debut at FinovateSpring in 2016, Blend is also an alum of our developer’s conference, FinDEVr. At the event, the company’s technical team showed the thinking behind the design of its platform including the importance of automated workflows, data connectivity, and innovation by design.

Photo by Tirachard Kumtanom from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

American Express Buddies Up to BodesWell to Build Self-Service Financial Planning Solution

American Express Buddies Up to BodesWell to Build Self-Service Financial Planning Solution
By David Penn Posted on
Categories: Alumni News, American Express, BodesWell, Daily news

American Express is getting into the financial planning business – and has partnered with Finovate alum BodesWell do help them do it.

TechCrunch reported today that Amex has launched a pilot of a self-service, digital financial solution called My Financial Plan to a group of 25,000 American Express card holders. The solution was developed in collaboration with BodesWell, whose technology enables banks, insurance companies, and financial advisors to empower their customers and clients to build their own financial plans.

BodesWell’s solution leverages an easy, drag-and-drop interface to support self-directed financial planning. Users have the ability to see income level projections, understand the impact of financially-significant life events like buying a house or sending a child to college, and receive advice and suggestions from Mentor Messages to help them adjust and improve their financial plans and meet their goals.

Making financial planning a part of a company’s financial services offering is an helpful response to the lack of financial planning for many families; BodesWell estimates that 85 million U.S. households do not have a financial planner. But in addition to supporting financial wellness and inclusion by adding financial planning services to their offering, BodesWell partners also benefit from “precious insights into their customers financial needs,” as BodesWell CEO Matthew Bellows pointed out earlier this year at FinovateSpring. This enables companies to better prioritize product development, research acquisition and retention strategies, as well as more accurately target products for revenue-generating up- and cross-sell opportunities.

“When we launched BodesWell at Finovate 2019 we made a promise to you,” Bellows said during his company’s Finovate appearance earlier this year, “we promised that we could provide digital financial planning to millions of Americans who don’t already have a financial planner.” News of the company’s partnership with American Express today is early evidence of promises kept.

Photo by Jess Vide from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Buy Now Pay Later Pioneer Sezzle Secures $30 Million in Funding from Discover

Buy Now Pay Later Pioneer Sezzle Secures $30 Million in Funding from Discover
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Sezzle

Days after Bloomberg News reported that Apple will add Buy Now Pay Later (BNPL) functionality to Apple Pay, we learn that Buy Now Pay Later “OG” Sezzle has received an investment of $30 million from Discover. And not only will Discover make a financial commitment to the company, which most recently demonstrated its technology on the Finovate stage at FinovateFall in 2018, Discover also entered into an agreement that will enable the card company launch a Buy Now Pay Later service on its own Discover Global Network.

“We are excited about our relationship with Discover, as we believe our mission, vision, and values align,” Sezzle CEO and Executive Chairman Charlie Youakim said. “Discover’s capabilities via their network and financial products will enhance our own offerings and provide more paths to financially empower our consumers.”

Today’s announcement is also the fruit of an agreement inked back in February that enabled Sezzle to work with selected merchants on the Discover Global Network. Discover SVP of Global Business Development and Acceptance Jason Hanson underscored the benefit that BNPL provides to its merchant partners, and also noted that the partnership would boost Sezzle’s ability to “grow its business and provide new payment opportunities.” To this end, as part of the collaboration, Sezzle also will join a dedicated referral program that will introduce Discover’s credit and debit card products to its customers.

Founded in 2016 and headquartered in Minneapolis, Minnesota, Sezzle enables consumers to make purchases at more than 34,000 participating retailers, and pay for those purchases in four, interest-free installments over six weeks. Approval decisions are available instantly, and using Sezzle has no impact on the consumer’s credit.

The explosion in interest in Buy Now Pay Later payment schemes has been a boon for companies like Sezzle that were helping consumers shop today and pay tomorrow before it was cool. Last month, Sezzle announced partnerships with Target and Barstool Sports, and the company continues to affirm its plans for an initial public offering in the U.S. – having launched publicly on the Australian Stock Exchange (ASX) in 2019.

Sezzle began the year signing a $250 million receivable funding facility with Goldman Sachs and Bastion Funding to help fuel the company’s growth in the U.S. and Canada.

Share this:

Send Post Twitter LinkedIn Facebook

M1 Finance Locks in $150 Million in New Funding

M1 Finance Locks in $150 Million in New Funding
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, M1 Finance

Another day. Another new fintech unicorn.

M1 Finance, which offers a financial super app featuring automated investing, lending, and banking services, has secured $150 million in Series E funding. The round was led by SoftBank’s Vision Fund 2 and takes the company’s total capital to more than $300 million. The Chicago, Illinois-based fintech now has a valuation of $1.6 billion, giving the firm “unicorn” status.

In its funding announcement, M1 Finance noted that the investment will help the company develop and deliver new products and features, continue to innovate on its platform, and expand its workforce. The Series E, which featured the participation of existing investors, as well, comes after a year in which the M1 Finance launched a trio of new solutions – Send Check, Custodial Accounts, and Smart Transfers – and reached more than $4.5 billion in total assets under management.

“Each funding round is proof and motivation that people believe in our mission of empowering financial well-being,” M1 Finance founder and CEO Brian Barnes said. “Financial well-being isn’t a luxury, it’s a necessity. Our platform helps people have more control, more freedom, and more power over their money. We experienced massive growth in the past year, and it’s extremely gratifying to see investors and clients believe in our vision and make it a reality.”

A Finovate alum since its debut at FinovateFall in 2016, M1 Finance combines the ability to build and maintain a personalized, automated investment portfolio – including access to fractional share investing – with a flexible line of credit and a digital banking service integrated into the user’s investment portfolio. M1 Finance offers both a free Basic program as well as a Plus program for $125/year (with the first year free) that has a lower borrowing rate, 1% cash back on spending, and access to Smart Transfers, Custodial Accounts, and Send Check functionality.

“M1 Finance simplifies the complex, time-consuming money management process for individuals,” SoftBank Investment Advisers Managing Partner Munish Varma said. “We believe the company is well-positioned to consolidate users’ financial lives on a one-stop super-app with its Invest, Spend, and Borrow products.”

Photo by Marcus Turnbo from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Is Apple Joining the Buy Now Pay Later Revolution?

Is Apple Joining the Buy Now Pay Later Revolution?
By David Penn Posted on
Categories: Apple, Daily news

If you had “Apple” on your bingo card as the next Big Tech company to edge its way deeper into fintech territory, congratulations! Bloomberg News reported this week that Apple’s Apple Pay solution will gain Buy Now Pay Later (BNPL) functionality – enabling consumers using Apple Pay to pay for purchases in interest-free installments.

The new service will leverage Apple’s partnership with Goldman Sachs – Apple’s credit card partner since 2019 – to facilitate what will reportedly be called Apple Pay Later. And while it is clear that Apple is taking advantage of one of the hottest retail trends in years, it is worth noting that Apple has ventured into installment payment territory before. Apple consumers can use their Apple Card to buy designated products in the Apple store and pay via monthly, no-interest payments. Apple cardholders also have been able to buy iPhones in 24 monthly installments with zero interest since shortly after the cards were launched in August of 2019.

According to Bloomberg, when users make purchases on their Apple device using Apple Pay, the service will enable users to pay either with four, interest-free payments made every two weeks, or over several months with interest charged. Neither Goldman Sachs nor Apple have responded to the Bloomberg report.

Fueled by powerful technology trends making online and mobile commerce easier for a new generation of consumers – as well as a low-interest rate economy – Buy Now Pay Later has grown to account for more than 2% of all ecommerce transactions around the world, according to a report from Worldpay. This growth is expected to accelerate by as much as 2x by 2024. In the United States, $20 billion worth of e-commerce transactions in 2019 used BNPL payment structures.

How will Apple’s arrival as a Buy Now Pay Later competitor impact the rest of the field of Klarna, Affirm, Splitit, Afterpay, Sezzle, and so many others? Is there enough room for growth in the BNPL market for multiple players to succeed before competition between them starts to intensify? For now, it is traditional credit card companies that have the most to lose from the rise of BNPL, as Millennials who came of age during the Great Recession continue to shun interest-charging payment methods, and Generation Z consumers grow up in a world in which Buy Now Pay Later options are not just available, but increasingly commonplace.

Photo by cottonbro from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Pleo is Europe’s Latest Fintech Unicorn; Nigeria-based Lidya Scores $8 Million

Pleo is Europe’s Latest Fintech Unicorn; Nigeria-based Lidya Scores $8 Million
By David Penn Posted on
Categories: Alumni News, Compass Plus, Daily news, Finovate Global, Lidya

Six years after its launch, Danish fintech Pleo has become Europe’s latest fintech unicorn.

The smart company card provider announced early this week that it had raised $150 million in Series C funding – the largest Series C round for a Danish company to date – earning a valuation of $1.7 billion in the process. The new capital, according to CEO and co-founder Jeppe Rindom, will help scale the business and “ramp up” the company’s product offering. Pleo will also look at opportunities for market expansion, both by entering new markets as well as “doubling down” on the markets that Pleo is already active in.

“While this investment round is taking Pleo to new heights,” Rindom noted in a post on the company’s blog this week, “our core mission remains the same: to make everyone feel valued at work. Since day one, we’ve been committed to creating a spending solution that encourages a work culture built on trust and transparency, instead of overwhelming control and needless bureaucracy.”

More than 17,000 companies from a variety of industries rely on Pleo’s smart company cards that automate expense reports and make company spending easier. Pleo integrates seamlessly with major accounting software packages – including Xero, Sage and Quickbooks – and features three pricing tiers, Essential, Pro, and Premium – to make its technology accessible to small companies as well as bigger firms with larger teams.

The Series C round was co-led by Bain Capital Ventures and Thrive Capital. Existing investors Creandum, Kinnevik, Founders, Stripes, and Seedcamp also contributed.

Our other international fintech funding news story centers on Finovate alum Lidya, a digital bank based in Nigeria that announced receiving an investment of $8.3 million this week. Lidya, which made its Finovate debut at our fall conference in 2016, helps small and medium-sized businesses quickly secure the financing they need in order to grow and expand.

Companies can build a profile in just five minutes, select the type of loan that works best for them, and secure financing within 24 hours. Lidya’s credit scoring technology, Sardis, leverages machine learning, a proprietary algorithmic model, and an analysis of more than 1,000 data points to build a credit profile and establish creditworthiness.

“A customer repeat rate of over 90% in Nigeria and Europe shows that we are providing the services that SMEs need,” Lidya co-founder and CEO Tunde Kehinde explained. “At the height of the pandemic, we started lending in Europe. It was an important means of financial support for multi-sectoral businesses, including care, groceries and other important sectors. Multi-sectoral businesses. When the world began to emerge from this crisis, we were innovative. We are committed to enabling a strong ecosystem of leading SMEs with our products, unlocking their potential and helping the growing economy rebuild better. “

The pre-Series B Funding round was led by Alitheia Capital (by way of the uMunthu Fund) and featured participation from Bamboo Capital Partners, Accion Venture Lab, and Flourish Ventures. Lidya has operations in Poland and the Czech Republic, as well as Nigeria, and manages a technical team in Portugal. The company has raised a total of $16.5 million.

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Photo by Alexandr Podvalny from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

LoanPro Scores $100 Million in Series A Funding

LoanPro Scores $100 Million in Series A Funding
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, LoanPro

The tech-first alums of our FinDEVr developers conferences are often as savvy fundraisers as they are sharp technologists. This week in our Q2 Alum Funding Report, we noted that two of the quarter’s biggest fundraisings were from companies that made their Finovate debuts at FinDEVr events: Brazilian neobank NuBank, which secured $750 million in funding in June, and financial data network Plaid, which raised $425 million in funding in April.

This week, we add another FinDEVr alum to this list. LoanPro, a Farmington, Utah-based fintech that made its FinDEVr debut earlier this year, has raised $100 million in Series A funding. The growth equity investment comes courtesy of FTV Capital, and will help LoanPro add to its SaaS-based loan management, servicing, and collections platform, as well as enter new lending verticals and make investments in other “client-centric growth initiatives.”

“As founders who started out as lenders, we understand the pain points that lenders experience,” LoanPro co-founder and CEO Rhett Roberts explained. “LoanPro was built by lenders for lenders – we use a modern tech stack to simplify the user experience of managing loans – we do the hard work on the back end to make the front end clean and simple to use.”

With more than $15 billion of loans under management and 600+ clients in the U.S. and Canada, LoanPro offers a diverse range of loans types and lending programs. The company’s product suite include prime, sub-prime, and personal loan products, as well as consumer, auto, and business financing solutions. LoanPro also offers point-of-sale financing and the retail financing rage of the day – buy now pay later payment options – as well. LoanPro’s platform gives lenders an automated, configurable workflow, real-time access to data and insights, frictionless payment collections, and a flexible lending program.

In addition to the financial support, FTV Capital will use its market knowledge and strategic network to help grow LoanPro’s platform. The firm’s Robert Anderson, who led the investment, will join LoanPro’s board of directors.

“FTV Capital is excited to partner with LoanPro’s strong, passionate leadership team who have built an industry leading SaaS platform based on a deep understanding of their market and the needs of their customers,” Anderson said.

Photo by Siritas Keawnet from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Cross River Bank Helps Bring Fly Now Pay Later Trip Financing to the U.S.

Cross River Bank Helps Bring Fly Now Pay Later Trip Financing to the U.S.
By David Penn Posted on
Categories: Daily news, Partnership Outlook

There may be few businesses more excited about the prospect of a post-COVID era than those in the travel industry – which makes the news of a collaboration between U.K.-based Fly Now Pay Later and BaaS provider Cross River Bank all the more musical to homebound ears. The partnership will enable Fly Now Pay Later to leverage Cross River Bank’s FDIC license to offer its travel financing solution in the United States. The company’s financing solution, available at checkout as well as via the Fly Now Pay Later’s Anywhere app, will enable U.S. travelers to book trips and spread the cost of travel over time.

“The recovery of travel is likely to be gradual, but when it happens, we hope that by giving people the freedom to book a trip and pay at a pace that works for them, will help spur reservations,” Fly Now Pay Later CEO Jasper Dykes said in May during the company’s recent funding announcement. “There are tens of thousands of people who have families around the world who need a frictionless way to finance their flights. By removing financial boundaries, we hope to open the post-COVID-19 world for travelers and reconnect people with their friends and families around the globe.”

For Cross River Bank, the partnership announcement with Fly Now Pay Later comes only a few weeks after the company completed its acquisition of data and analytics firm PeerIQ. In addition to supporting Cross River’s mission to provide greater access to financial services and enable greater financial inclusion, the acquisition will enable Cross River to expand its offerings to include end-to-end SaaS solutions, advanced portfolio analytics, as well as further data aggregation capability and risk management tools. In June, Cross River Bank also unveiled Cross River Digital Ventures, a venture capital division that will invest in companies innovating in lending, payments, investing, and fintech that offer “strategic value” to both Cross River and the technology industry more broadly.

“By providing strategic support to early-stage companies we can build on the Cross River momentum to fuel and strengthen the next wave of fintech innovation,” Cross River Head of Corporate Development Hillel Olivestone said. “These are promising startups that align with Cross River’s mission and values, and we look forward to working with them to grow and expand the fintech ecosystem.”

Photo by Anton Atanasov from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Open Finance Platform Moneyhub Secures $18 Million to Fuel Expansion

Open Finance Platform Moneyhub Secures $18 Million to Fuel Expansion
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, Funding, Moneyhub

In its biggest investment round to date, U.K.-based Open Finance platform Moneyhub has secured $18 million in funding to support its expansion into new markets. The round was led by Sir Peter Wood, founder of Direct Line and Esure, via his new investment vehicle, SPWOne.

“It is incredibly rewarding to be able to deliver results to both investors and clients in this truly transformational landscape,” Moneyhub CEO Samantha Seaton said. “It is a fantastic vote of confidence from Sir Peter and his team, who are renowned for foreseeing game-changing growth opportunities – and a ringing endorsement of our team and our strategy for applying new technology where the rules of engagement have been turned upside down.”

A Finovate alum for more than four years, Moneyhub demoed the SmartAsset feature of its solution at FinovateEurope 2017. At the event, the company showed how SmartAsset’s AI-driven, intelligent messaging functionality helps users better manage their finances. In the years since, Moneyhub has grown into a leading open finance and data intelligence platform that offers both API and white label solutions to help businesses leverage personalization to enhance the customer experience. In the U.K., Moneyhub currently provides customer-permissioned financial data access to more than 200 financial services providers via 584 connections with an additional 3,500 connections in Europe.

Moneyhub’s funding announcement comes on the heels of a new partnership with Triodos Bank, a sustainable bank that supports working toward positive social, environmental, and cultural change. Founded in 1980, Triodos Bank serves more than 700,000 banking customers in the U.K., Germany, Spain, the Netherlands, and Belgium. The bank has lent more than £8 billion to support projects around the world that are dedicated toward “benefitting the people and (the) planet.” Triodos Bank also co-founded the Global Alliance for Banking on Values (GABV), a 63-bank network designed to promote sustainable banking.

“We are pleased that our customers will now be able to integrate their everyday banking with Moneyhub’s app and enjoy the many benefits of Open Banking, such as helping them to easily track spending and set budgets to help manage money,” Triodos Bank U.K. head of retail banking Gareth Griffiths said.

In addition to its partnership with Triodos Bank, Moneyhub teamed up with mortgage market insights and intelligence firm Hometrack, shared branch banking innovator OneBanks, and adtech specialist Zedosh this summer; partnered with financial health platform Level Financial Technology and charitable fundraising app Kynder this spring; and began the year collaborating with professional services company Aon and ESG investment platform The Big Exchange.

Share this:

Send Post Twitter LinkedIn Facebook

Karat Financial Banks $26 Million for its Credit Card for Digital Creatives

Karat Financial Banks $26 Million for its Credit Card for Digital Creatives
By David Penn Posted on
Categories: Daily news, Funding

This week in our Finovate Fintech Halftime Review eMagazine, Senior Analyst Julie Muhn explored the trend of niche banking. Niche banking leverages the current explosion in identity-awareness to create unique and tailored banking experiences for members of a growing number of different communities.

The news that Karat Financial, a Los Angeles, California-based company that offers a credit card designed for digital creatives, has raised $26 million in Series A funding is the latest indication that this trend may only be growing stronger.

Launching its “Black Card for Creatives” last year, Karat is targeting the digital influencer economy of YouTubers, Twitch livestreamers, and others who often struggle to translate their online earnings into creditworthiness in the eyes of traditional lenders and banks. And while this challenge extends to a broader population than just digital creatives, there is no small benefit for a banking services company in being associated with one of the more vibrant developments in 21st e-commerce and entertainment.

Karat offers a business card with cash back rewards, and zero-cost credit advances for sponsorship payments. The corporate card acts much like an American Express card, with balances paid off monthly. This lack of interest charges – as well as Karat’s no-fee policy – helps keep the cost of using the card as low as possible, a priority for digital creatives with potentially volatile revenue sources.

To this point, in lieu of a traditional bank application, Karat wants to know about Instagram followers and sponsorship deals, YouTube subscriber counts and Twitch donations in order to get digital creatives the access to credit that is commensurate with their success as online influencers.

Karat was founded by Eric Wei, a former product manager at Instagram, and Will Kim. This week’s Series A round – which consisted of $15 million in debt financing and $11 million in venture funding – was led by Union Square Ventures and featured participation from GGV Capital and SignalFire.

Photo by Castorly Stock from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Human Resources Management Innovator Gusto Teams Up with Xendoo

Human Resources Management Innovator Gusto Teams Up with Xendoo
By David Penn Posted on
Categories: Alumni News, Daily news, Gusto

Cloud-based payroll benefits and human resource management innovator Gusto announced a partnership with online accounting and bookkeeping firm Xendoo to help launch Xendoo Payroll. Gusto Head of Partnerships Somrat Nyogi described the partnership as part of an overall trend toward digitization of key business operations. “Through our partnership, Xendoo is combining payroll and bookkeeping services to deliver financial peace of mind to small business owners,” Nyogi said.

Not only is this week’s partnership announcement part of a relationship between the two companies that goes back “for years,” but the collaboration, according to Xendoo CEO and founder Lil Roberts, also anticipates the beginning of a “long-term deeper tech partnership” between the two firms.

“Partnering with Gusto was a natural decision as we both strive for the same outcome: taking the stress out of finances for small business owners so they can focus on what matters most – growing their businesses,” Roberts explained. “Integrating Gusto’s embedded payroll into our new Xendoo Payroll solution will allow us to better serve our customers and expand our offering to create an all-in-one-place solution for the SMB community.” 

Available via API, Gusto Embedded Payroll enables developers to embed and customize payroll functionality into their platforms. In addition to Xendoo’s launch, Gusto reported that “more than a dozen” companies already have begun to deploy the new payroll solution. Moreover, these firms will be able to leverage their new payroll functionality to gain deeper insights into their customers and discover opportunities to provide additional services. Among those first out-of-the-gate with Gusto Embedded Payroll is SMB banking platform Novo, which will become one of the first platforms of its kind to offer integrated payroll services.

“Payroll is one of the biggest expenses for small businesses, and being able to integrate it more deeply into the whole financial picture opens up many opportunities to optimize cash flow and operations,” Novo VP of Product Matt Hamilton said. “We’re excited about working with Gusto to provide the most flexible payroll experience to our businesses.”

Making its Finovate debut as ZenPayroll in 2014, Gusto was founded in 2011 and is headquartered in San Francisco, California. From its origins as a payroll services startup, Gusto has grown into a small business human resources management platform that helps companies with employee onboarding, benefits, insurance, and other HR operations. Plans start as low as $45/month and more than 100,000 businesses are on the Gusto platform.

Gusto has raised more than $516 million in funding, and includes Fidelity Management and Research Company, and Generation Investment Management among its most recent investors. Earlier this month, the company announced its first acquisition, a startup called Ardius that automates tax compliance for companies with R&D tax credits. Joshua Reeves is Gusto CEO.

Photo by Enric Cruz López from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Investment App Stash Grabs Financial Literacy Platform PayGrade

Investment App Stash Grabs Financial Literacy Platform PayGrade
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, Mergers & Acquisitions, Stash

Along with the fanfare surrounding so-called meme stocks and the “power of the individual trader” last year, there was a dark side. Investing and trading platforms that had embraced gamification were being accused of not fully preparing their customers for the dangers involved in stock trading – especially in volatile, illiquid stocks. Critics demanded that these platforms spend more time – and money, if necessary – educating their customers for their own benefit as well as for the good of the investing and trading industry, which has recovered impressively since the dot.com bust 20 years ago.

This is the spirit in which we take the news that Stash, a New York-based, mobile-first investment platform that made its Finovate debut in 2017, has acquired financial literacy platform PayGrade. The terms of the deal were not disclosed, but the acquisition marks Stash’s first acquisition and its biggest fintech news headline since a whopping $125 million Series G fundraising back in February.

Brandon Kreig, CEO and co-founder of Stash said that the acquisition was an example of the company’s mission to “empower everyday Americans to invest for the future.” He noted that personal finance education is not emphasized in American schools – with 43 out of 50 states not requiring coursework in personal financial management – and that an overwhelming number of American adults – as much as 80% – live “paycheck to paycheck.”

“With PayGrade,” Kreig explained, “Stash will provide teachers, parents, and children with interactive tools to learn effective money management skills that will last a lifetime.”

Stash enables users to begin investing on its platform with as little as $1 a month. The company’s “Stash Beginner” program allows investing – including fractional share investing – as well as banking, portfolio recommendations, savings strategies, and a Stock-Back card that helps users earn stock every time they use the card for shopping. Stash also offers Growth and Plus plans that add features such as portfolios for children, premium research, and enhanced bonuses for using the Stash Stock-Back card.

Purchasing PayGrade is not the only way that Stash will support the cause of financial literacy this year. Stash’s acquisition news arrived just a few days before the company announced that it was partnering with the Suh Family Foundation and the Big Yard Foundation to launch a financial literacy program over the summer. Dubbed the Stash101 Summer School, the program will be conducted in partnership with Portland Public Schools and will give 160 middle school students an introduction to vital money management and wealth building.

“From investing and banking to education and retirement planning, we believe everyone has the power to achieve greater financial freedom—one step at a time.” Krieg said. “We’re thrilled to deepen our commitment to childhood education through Stash101 and this special summer school program in Portland with the Suhs and Big Yard. It’s going to be a tremendous four weeks for the kids.”

Stash101 is part of the Portland Interscholastic League Trajectory Math Program, which provides additional learning resources for historically underserved students. The course will include a simulated economy experience in which the students will complete tasks like renting desks, while earning a salary and learning about the difference between savings and credit. The classes will be held between July 6 and July 27 at a pair of schools in the Portland School system.

Photo by Anna Nekrashevich from Pexels

Share this:

Send Post Twitter LinkedIn Facebook