A similar business story, being staged in Europe and Latin America
Mobile digital application-based personal banking, seems to be a hot investment spot.
Recently, the American fintech company “Empower Finance” announced that it has completed a Series A financing of US $ 20 million with investors Venture Capital and Defy Ventures. David Verez, founder of Nubank, a large Latin American fintech company, also participated in the round.
Only a few days ago, the British company Revolut, which also provides mobile APP banking services, has just completed a $ 500 million Series D financing with a valuation of $ 5.5 billion. On the same track, the financing speed of the personal digital bank Chime is also very fast. The latest financing announced in December last year was completed with a post-investment valuation of $ 5.8 billion, which is four times the market value of Chime at the beginning of 2019-although it may be overvalued. .
Despite the fierce financing and fierce competition, digital banking is still the “small fish” in the financial services ocean, accounting for about 3% of the market, and there is still a lot of market space.
Empower Finance is headquartered in San Francisco and is a project led by Warren Hogarth, a former partner at Sequoia Capital. The company’s advantage is to combine artificial intelligence technology with financial planners to help millennials accumulate wealth. The platform provides checking accounts and savings accounts. The current annual commitment is 1.60%, and there is no minimum limit, no overdraft fees, and unlimited withdrawals. This innovative product form has attracted more than 600,000 active users since the company was founded in 2017.
Not only that, through analysis of the account holder’s bank and credit card, Empower Finance will also advise users on how much money they should deposit and how much they should spend to help set the budget. The company believes that users pay $ 6 a month to the platform, and the platform can save users an average of $ 1,300 per year.
Because Empower Finance’s business is based on mobile networks, there is no fee for a physical bank branch and no major updates from the old software are needed, so it can reduce costs by 60% to 70%.
“The industry looks crowded, but consumer financial services in the United States have a total volume of US $ 2 trillion. From a single company level, even if each ‘new upstart’ attracts 2 to 3 million customers, the total is The ability to reach billions of dollars in market value is the key to the track’s ability to attract capital, “said Warren Hogarth.
It is reported that Empower Finance previously raised an undisclosed seed fund from Sequoia, and was subsequently led by Initialized Capital to complete a $ 4.5 million financing.