In this past few weeks alone we’ve heard from a number of fintechs that are dedicated to helping kids learn how to be responsible with money.
We caught up with Taylor Burton, co-founder of Till Financial, one of the many companies that are innovating in the youth financial wellness space. The Massachusetts-based startup, launched in 2018, introduced its free, collaborative family banking platform this spring. At the same time, Till secured $5 million in funding in a round led by Afore Capital – which is where our conversation begins.
You’ve just secured a significant investment. What does the funding mean for Till?
Taylor Burton: It means an increased ability to positively impact the trajectory of kids as they prepare for launch. The group of investors that we assembled share our vision for how collaborative family banking should look—we are excited to continue to add more supporters as we scale our platform.
We are thrilled to have the support of like-minded investors including Elysian Park Ventures, Pivotal Ventures with Magnify Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM Ventures (the family office of the founders/CEOs of Stadium Goods) and Lightspeed Venture Partners’ Scout Fund. Also participating were angel investors such as the founders of fintech Petal, the founders of alcohol marketplace Drizly, the president of Transactis, and the president of 1800Flowers.
We will be adding to our high-quality team in all areas that support our customers through their journey on Till. Marketing that provides the content to help families have the first “real” conversation about money. Development to accelerate our vision of what our product can be, plus integrate all the great ideas coming out of the Till user community. And customer success to ensure that a Till family is maximizing its experience on the platform.
How does Till help empower children to become smarter spenders?
Burton: Till is designed to encourage open and honest discussions between parents and their kids. The goal is to help kids learn by doing and to gain confidence in spending decisions. We do this in the following ways:
The right tools: Till equips kids with their own bank account, digital and physical debit cards, and goal-based savings tools.
Emphasis on community: A child can easily set up a goal on the app that they can use to start saving toward and give family members (such as grandparents, other family members or community members) the opportunity to help pitch in. This gives members of the child’s network an opportunity to support them towards their goals. After all, it takes a village, and Till helps facilitate that.
Visualizing financial responsibility: Kids can also set up recurring payments for different ongoing responsibilities or subscription services that will get them used to the concept of paying bills on a timely basis.
That being said, along with teaching kids valuable saving habits, we want to be advocates for kids to feel empowered in their spending decisions just as much, if not more. Parents and the traditional legacy banking options tend to focus mostly on a child’s savings. At Till, we believe that we need to prioritize preparing kids to be smarter spenders, while supporting them through savings and investing. On our platform, kids learn to spend with intention and purpose, while parents gain confidence and trust based on transparency and accountability.
What is unique about the method that Till Financial uses?
Burton: One unique part of the app are the financial agreements which allow kids to have greater agency and responsibility over their money. Parents can create agreements and tasks that encourage kids/teens to understand the value of every dollar. By visualizing the financial responsibility of earning every allowance, they are able to be active participants in their financial journeys.
Additionally, as families are more spread out over time, Till reinforces the impact of community by leveraging family, friends, and members of their close networks to help the child reach their financial goals. Till also offers merchant partners curated with kids’ interests in mind. As we continue to grow, we will have more opportunities to add on to this list and provide kids with more incentives.
How does Till make money?
Burton: Till aims to be “first in wallet” and “only in wallet,” unlike other card offerings targeted at adults fighting to be “top of wallet.” Till captures value (revenue) when we deliver value to our customers. Unlike other legacy banks—and even some early digital ones that often time charge monthly or subscription fees—Till is free to all consumers, making us accessible to all users.
Till earns revenue in three ways: We earn an interchange fee (like all debit/credit cards) for facilitating the transaction between our users on vendors. There are also affiliate fees. We want our user’s dollars to go farther. We are negotiating both broad and proprietary relationships with the vendors that our kids spend with each day. Our kids get access to discounts and exclusive access and we get a percentage when the kid does choose to make a purchase. Everyone’s a winner: the kids receive a steeper discount on items that they were already planning to buy, while the merchant gains a new customer.
Lastly, there’s origination. Consumers’ needs change over time and our ability to create the best outcomes for our families depends on focus. It is not Till’s intention to be a kid’s forever bank, just their first bank. With that in mind a Till kid should be treated with the respect that they have earned on our platform for positive financial decisions at launch. When the time comes for kids to leave the house and strike out on their own, Till introduces them to our launch offers market. There, they can receive preferential treatment on loans, credit cards, and adult debit/checking. The adult financial institution gets a better, more valuable client; our consumer receives the advantages they deserve for being of sound financial mind; and Till receives an origination fee.
How important are partnerships to Till’s business plan?
Burton: Till’s merchant and venture partners are interwoven into our business plan to seamlessly offer kids/teens and their families the best resources to develop responsible spending habits. As Till continues to expand their merchant partnerships, kids will have greater access to exclusive offers that they can use on items that they are already planning to purchase. These key partners include top tier brands that kids already shop at such as Adidas, Stadium Goods, and Dick’s Sporting Goods. And, of course, we also believe that the partnerships with our investors are a key component of the continued success of Till. We want our investors to share the same mission of empowering the next generation of economic actors.
What in your background gave you the confidence to tackle this challenge?
Burton: For starters, all three of us co-founders are dads and we’ve all had our share of financial awakenings whether with our kids or ourselves personally. That being said, Till is not just for us, but for the 50 million families that know there is a better way to raise a family; where financial conversations are collaborative not confrontational, and where all of our kids are better prepared for the modern economy.
On the company-building front, the founding team brings together everything needed to build a valued and valuable company. I bring expertise in direct-to-consumer products in a heavily regulated market (Drizly and alcohol delivery), coupled with innovation success in payments rails and merchant partners integration (PayPal and card-linked offers). Tom (Pincince) came to me with this idea after selling his third company. This serial entrepreneur has built a career by finding gaps and opportunities created by market movements and technology changes. And then Brian (Chemel), a multi-time technical founder equipped to marry the best of the old and the new to build a secure and scalable infrastructure backing a delightful and engaging user experience.
Looking back on 2020, what is your biggest professional takeaway?
Burton: We learned to be comfortable with being uncomfortable. COVID-19 impacted people’s businesses differently and when you layer in a fundraise and being an early stage start up, that can either make you or break you. In our case I think it really codified our commitment to our mission and vision and has ultimately put us in the position we are in now.
What can we expect from Till over the balance of 2021 and beyond?
Burton: Our first job is to become an integral part of millions of families’ every day financial activities. We do this by building an engaging platform that delivers both economic and social value. Along the way you will see Till add features that help parents and kids understand where they are on a financial journey and how their decisions can be rewarded by access to opportunities, experiences, and offerings. We are here to serve our users who are already helping us set priorities and guide us to new features and functionality. We are already getting requests for collaborative investing and philanthropic giving features, for example.
We are thinking big because the market is massive– there are currently 50 million pre-banked kids in the U.S. and yet, the average middle-class family in America spends $284,570 per child by age 18. At Till, we believe kids are a major economic force, as $18 billion per year is given by parents to children in the form of an allowance (mostly as cash). We recognize that they are influencers on larger family decisions, such as cars, vacations, etc. By putting the spending power back into the hands of young people, we want to be the driving force that replaces awkward family conversations about money with real actions and experiential learning.