Rewarding Savers: HMBradley Raises $18.25M To Bank On Consumer Saving Habits

As consumers look for ways to make their money earn more money, digital banking platform HMBradley is developing programs to reward savers.

The Santa Monica, California-based startup closed on $18.25 million in Series A funding to build on its credit program and savings offerings. Acrew Capital led the round, which gives HMBradley approximately $22 million in venture-backed funding since the company was started in 2019.

“Everyone is paid the same interest rate,” Zach Bruhnke, co-founder and CEO of HMBradley, told Crunchbase News. “When you talk to a typical bank CEO, they want long-term, stable deposits that are growing. Consumers want to make more money for their money.”

The young company aims to align those incentives by offering higher annual percentage rates as customers save more. Not everyone will be in the top tier, Bruhnke said, but he believes this approach will drive more adoption.

For example, customers won’t earn dividends if they don’t utilize direct deposit, but people who save up to 20 percent of their earnings will yield up to 3 percent in interest.

“Tiers vary–the average is 2 percent APR–but it is really about aligning consumer behavior with the percentage of income they are saving,” he added.

Banking on engagement

Offering rewards is one of the up-and-coming attraction and retention approaches fintech companies are utilizing. A Crunchbase data search for fintech companies that described offering rewards to consumers yielded a little over 118 venture-backed companies that raised money in the past five years.

Companies raising more than $1 million in the past month include:

Meanwhile, HMBradley unveiled its savings program in April–through an arrangement with Hatch Bank–and has received more than $90 million in deposits. Its deposits doubled month-over-month in October, Bruhnke said.

In July, the company introduced a credit card and its one-click credit application. The card offers 3 percent cash back for purchases in their highest spending category, 2 percent for the next highest category, and 1 percent for all additional charges. Consumers who pair the card with a deposit account earn more.

“One-click credit is going to be the future because consumers will know where they stand and what they are good for in an easy manner,” Bruhnke added. “There is a renewed focus on how to drive deeper in the mindset of customers. Engagement is double what we have seen, and if it continues to grow, we think consumers will expect credit in a different way.”

Vishal Lugani, founding partner at Acrew Capital, supported the Acorns portfolio while he was with Greycroft and said in an interview that he is impressed with how fast the HMBradley team was able to roll out a credit program. It was a testament to the team’s early vision of setting everything up on the back end before launching.

“The engagement I saw with early users of the company was exceptional, measured by the percentage of people sending their paycheck for direct deposit, opting in with the one-click credit, and the staggering percentage of users engaging with their savings goals,” Lugani said. “While other credit card companies’ rewards programs are struggling, HMBradley is rewarding you on what you spend regardless of where.”

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