Almost every personal finance company on Forbes’ 2019 Fintech 50 list is betting on the insights of behavioral finance to take their company to the next level. List returnees Lemonade and Acorns have been doing this successfully for years. Our three newcomers on the list (Chime, Even and Root Insurance) are doing this with the goal of helping the undeserved save more. And all of them allow you to save, invest or insure conveniently and quickly from your cellphone.
Here are seven of the country’s most promising personal finance and insurance companies:
For $1 a month, the micro-investing mobile app rounds up each debit or credit card purchase to nearest dollar, investing extra pennies in diversified portfolios of ETFs. For $2 a month, users can invest in retirement accounts too. A $3-a-month service also includes a debit card and checking account.
Funding: $257 million from TPG, PayPal and BlackRock and others. Latest valuation: $860 million
Bona fides: In past year, has almost doubled user base to 4.5 million
Cofounders: Father and son Walter and Jeff Cruttenden
Current CEO: Noah Kerner, 41, a cofounder of Millennial creative agency Noise who did a stint as chief strategy and marketing officer at WeWork
Mobile-first bank offering a Visa debit card, checking account and optional savings account and tools, including a service that rounds up purchases on debit card and deposits extra pennies in savings. “Get Paid Early” service allows members access to direct-deposited paychecks up to two days early with no fee. Recently acquired Pinch, an app to helps users improve their credit scores.
Funding: $105 million from Menlo Ventures, Crosslink, Forerunner Ventures and others. Latest valuation: About $500 million
Bona fides: In excess of 2.6 million accounts, with 350,000 being added per month
Cofounders: CEO Chris Britt, 45, and CTO Ryan King, 42
Offers its 85 million plus “members” a growing suite of free services, including credit scores, tax prep software, help fixing credit report errors and alerts of new accounts opened in a user’s name. Credit Karma earns referral fees when users bite on the personalized offers for credit cards and loans it shows them.
Funding: $869 million from CapitalG (formerly Google Capital), Silver Lake Partners, Tiger Global Management, Susquehanna Growth Equity, Ribbit Capital and others. Latest valuation: $4 billion
Bona fides: Has provided more than 4 billion free credit scores to consumers
Cofounders: CEO Kenneth Lin, 43; Chief Revenue Officer Nichole Mustard, 45; and CTO Ryan Graciano, 37
Palo Alto, California
The mobile app (formerly Activehours) allows workers with bank accounts to tap into their already earned pay the minute they leave work instead of waiting until payday. Users can cash out up to $100 per paycheck or up to $500 for active users. Earnin charges no fees or interest, instead asking customers to tip what they think is fair.
Funding: $190 million from Ribbit Capital, Matrix Partners, Andreessen Horowitz, DST Global and others. Latest valuation: $800 million, according to Pitchbook
Bona fides: Employees from more than 50,000 companies, including Starbucks and Pizza Hut, use the app
Cofounder & CEO: Ram Palaniappan, 45, former president of RushCard, a prepaid debit card that allowed users to cash their paper checks for free
Budgeting and savings mobile app that links to users’ bank accounts, asks about upcoming bills and estimates how much they have left to spend. Employees can pay $8 a month to get interest-free access to money they’ve already earned ahead of payday. Will soon offer automatic savings feature.
Funding: $51 million from Khosla Ventures, Valar Ventures and others. Latest valuation: $102 million, according to Pitchbook
Bona fides: More than 400,000 users from more than 10 companies, including Walmart and Kronos
Cofounders: CEO Jon Schlossberg, 31, COO Quinten Farmer, 28 and Head of Product Ryan Gomba, 27
New York City
Mobile and online platform provides renters’ insurance from $5 a month and homeowners’ insurance from $25 a month. Pays many claims instantly using artificial intelligence; discourages dishonest claims by donating excess (over claims, expenses and a fixed fee) to charities of customers’ choosing.
Funding: $180 million from Sequoia, Aleph, General Catalyst, SoftBank and others.
Bona fides: More than 300,000 customers. Recently partnered with WeWork to insure residents in WeLive, its residential offering
Cofounders: CEO Daniel Schreiber, 47, and COO Shai Wininger, 45
Sells app-centric car insurance in 22 states with pricing based heavily on how an individual customer drives. Prospective customers download Root app, activate a two-to-three-week test drive and then get a quote (if they qualify as a good driver). Users can pay, file a claim and get roadside assistance in-app.
Funding: $177.5 million from Tiger Global Management, Redpoint Ventures, Ribbit Capital and others. Latest valuation: $1 billion
Bona fides: Says good drivers can save about $1,187 per year on car insurance
Cofounders: CEO Alex Timm, 30, a former Nationwide consultant, and CTO Dan Manges, 33, the former CTO of Braintree before it was acquired by PayPal