January 14, 2016
Moneybox, a new savings and investment app targeted at millennials, has raised $3M from Betfair and Ocado investor Samos Investments and a group of high-profile angel investors. The funding will be used to expand the core team and for the development of the Moneybox app ahead of its launch in early 2016.
The company has also announced that Daniel Godfrey, former Chief Executive of The Investment Association (IA), the representative body for the UK’s £5.5 trillion investment management sector, has joined as an advisor. Godfrey will be advising the company on its regulatory authorization process and product design.
Founded in 2015 by Charlie Mortimer and Ben Stanway, Moneybox enables users to achieve their long-term saving goals by saving and investing their spare digital change from everyday card transactions into a stocks and shares ISA.
Ben Stanway, Co-founder of Moneybox, commented in the press release, The funding will allow us to expand our core team to around 20 people and refine the app as we head towards our UK launch. We want to make saving and investing easy and engaging. By enabling users to get started investing with just £1 and making the investment options clear and simple, we hope that Moneybox can help more and more people achieve their long-term financial goals.
Daniel Godfrey added, For too long, the investment industry has overlooked the younger generation. Moneybox, with its capacity to round up digital ‘spare change’ into long-term investments through an ISA, can revolutionize the investment landscape and play a real part in helping people build a better, safer future for themselves.
There are similar apps in the market that are helping the next generation in savings and investment. A robo-banker called Acorns siphons off savings and then invests the money on your behalf. Acorns connect to a user’s primary checking account along with credit/debit account(s) including other spending accounts (PayPal). It rounds up each purchase to create investable savings into an Acorns investment account. Additional savings amounts can be added at any time to an Acorns account either as a lump sum or recurring transfers. An investment portfolio is developed by Acorns which is based on the modern portfolio theory based on your investment profile and invested in ETFs (low-cost funds) either in BlackRock, Vanguard or PIMCO based on five diversified portfolios.
Digit connects to a user’s primary checking account to analyze income, expenses and recurring bills to determine funds that can be set aside as savings based on a savings algorithm. Savings are deposited to a Digit bank account held either at Wells Fargo or Opus Bank for the customer’s benefit. It can be withdrawn or transferred to a checking account at any time by texting to Digit. Users have the ability to save more and less by setting a rule. Digit Plus is a rewards program that pays you for saving. The user gets 5 cents for every $100 he/she keeps in Digit for three months. Bonuses are paid every week for as long as you keep saving. The company connects to over 2,500 US financial institutions and credit unions. The company has received a total funding of $13.8 million from investors such as Baseline Ventures, FreeStyle, General Catalyst Partners, Upside Partnership, Operative Capital, Initialized Capital, NYCA and Google Ventures.
A number of apps are helping users have self-control so that they can save money for the future. Apart from the above-mentioned ones, apps like Level Money and Mint track all the ways users spend to let them know in one glance how to stay on budget. Apps are key to getting millennials back on track financially.