Easy money: six companies removing the friction in financial management
The world of finance is one that has for many years been more or less static. It has traditionally relied upon some sort of middleman to facilitate interactions between people and their finances, whether they are investments, purchases, or savings. With the advent of mobile technology, many of the barriers that once existed between consumers and their financial capabilities are being dropped. Here are six companies that give mobility to ease and mobility to financial management, reducing the friction between humans and their finances.
Digit
What does it do? Digit is an app that analyses its customers spending habits and uses this to save a certain amount of the customer’s money every day. This is different than saving money at a bank because it is automatic – the app decides for you when to save money based on your salary, spending patterns, and other variables. The key to the company’s success is the way in which it uses the accrued interest of users in order to cover its overhead costs.
Who is behind it? This strategy may seem like an unappealing feature to some, yet Ethan Bloch, the company’s founder, actually argues that the amount that people would typically lose on the interest is made back on the saving promoted by the app. They have raised money from investors General Catalyst Partners, Baseline Ventures and Google Ventures. A core team of eight helps run the company while they consult a group of advisors that includes people behind Square and AirBnb.
Coinjar
What does it do? Coinjar is a mobile app that allows you to buy and sell bitcoin using a number of currencies. The app lets you deposit and withdraw money for free, and allows a more fluid approach to foreign exchange and the digital currency. What Coinjar does well is bring bitcoin – a digital currency confusing for most – to a sleek, user-friendly, mobile format.
Who is behind it? The company is based in Australia and is led by Ryan Zhou and Asher Tan, who both have backgrounds in economics. They have received funding by AngelCube and Blackbird Ventures. The duo has expressed in interest in bitcoin and believes that their company can help spread the popularity of the digital currency.
Billguard
What does it do? Billguard allows its users to track charges to their credit cards and bank accounts. It also lets these users see analytics of their spending and check their credit score. This app functions as a security measure as well – it notifies users of all their purchases and lets them know when their card is used away from home.
Who is behind it? Yaron Samid founded the company with Raphael Ouzan after he fell victim to credit card fraud in 2009. Since the company’s founding in 2010, it has claimed to notify users of over $60 million worth of suspicious credit card charges. The company has offices in New York and Tel Aviv, and was named a ‘Top 10 Tech Company’ by American Banker.
Robinhood
What does it do? Robinhood is an app that allows its users to buy and sell stocks, much like they would using a traditional trading app. Where this app differs is that it allows users to trade without the typical transaction fees that come with other services. These transaction fees can sometimes cost up to $10 per transaction. This makes Robinhood an ideal alternative to an investor who is just learning the ropes of the stock market or does not have a large sum of money with which to invest.
Who is behind it? So far, Robinhood has raised $66 million from a variety of investors including entertainers Snoop Dogg, Nas, and Jared Leto according to the founders Vladimir Tenev and Baiju Bhatt, who were roommates at Stanford. In an interview with CNNMoney, Bhatt argued that the reason that Robinhood has found success with musiwere only made possible by loosened SEC restrictions made possible by President Obama’s JOBS act. The potential for normal people – or as their website refers to them as, the 90% – to invest in startups was not possible before companies like SeedInvest.
Who is behind it? Ryan Feit and James Han played large roles in passing the JOBS act, legislation that allowed unaccredited investors to buy equity in startup companies. This opened the door for their company, SeedInvest, to come to fruition. Currently, the team behind SeedInvest has grown to over 20 and SeedInvest has successfully funded over 40 startup companies.
SaveUp
What does it do?
SaveUp offers incentives for its users to save. Users earn ‘credits’ by adding money to their checking accounts, paying off loans, etc. By saving, users receive credits that they can use to enter lotteries for prizes. This app, by giving users incentive to be financially responsible, makes a game out of saving.
Who is behind it?
SaveUp was founded by Priya Haji and Sami Shreibati. They received funding from the Boston-based Doorways to Dreams fund. They refer to their idea as Prize Linked Savings – the idea that fun rewards can replace interest in motivating people to save and pay off debt.
