The Future Of Personal Finance: Fintech 50 2020

The 11 personal finance start-ups on this year’s Fintech 50 reflect both the rise of the digital bank and the growing areas of consumer financial behavior that fintechs are seeking to influence.

Two neobanks—MoneyLion and Dave—are on the list for the first time this year, joining veteran Chime. Both newcomers are positioning themselves as simpler, cheaper and more consumer friendly alternatives to traditional banks and their gotcha fees. Dave promotes itself with a cartoon bear and a “Banking for humans” tagline; instead of hitting users with overdraft fees, it offers them cash advances of up to $100.

At the same time, returning member Acorns, which started as a “round-up” app that moved extra pennies from credit and debit card purchases into ETFs, has also added checking accounts and debit cards. And Credit Karma, the original free credit score startup, has rolled out its own bank service: high yield FDIC-insured money market accounts. Significantly, none of our picks have bank charters themselves; instead, they’re part of a growing trend whereby digital innovators are partnering with little known FDIC-insured banks. 

Meanwhile, fintechs are offering creative solutions to make managing money easier, particularly for those who don’t have enough of it. Newcomer Propel’s mobile app helps food stamp recipients check their benefit balances, load digital supermarket coupons and even hunt for jobs and social services. First-timer Tally is aimed at consumers struggling to pay off credit card debt.

Here are the 12 personal finance companies that made the Forbes Fintech 50 in 2020: 

Acorns

Headquarters: Irvine, CA

The original round-up app, for $1 a month Acorns moves extra pennies from your debit and credit card purchases into investment portfolios of ETFs. For $2 a month, Acorns adds an IRA. For $3 a month, adds IRAs, checking and debit card. New for 2020: Save and invest straight from your paycheck. 

Funding: $257 million from Paypal, NBCUniversal, BlackRock and others; latest valuation of $860 million

Bona fides: More than 6.8 million users (up from 4.6 million a year before), including 1 million with IRAs

Cofounders: Father and son Walter and Jeff Cruttenden

CEO: Noah Kerner, 42, a cofounder of millennial creative agency Noise, also did a stint as chief strategy and marketing officer at WeWork

Affirm

Headquarters: San Francisco 

Offers consumers instant fixed rate point-of-sale loans when they check out online at participating merchants. Loans generally last from three, six or 12 months, with no fees and a 10% to 30% annual percentage rate, depending on a borrower’s credit score and other data. (Select retailers, such as Peloton, subsidize special 0% loans.) Mobile app rolled out last October allows users to pre-qualify for Affirm financing and then shop anywhere. 

Funding:  $800 million from Founders Fund, GIC, Khosla Ventures, Lightspeed Venture Partners, Spark Capital, Thrive Capital and others; latest valuation of $2.9 billion

Bona fides: Has signed up more than 4,000 merchants, including Casper, Expedia, The RealReal, Walmart and Wayfair and generated $4 billion in loans in 2019

Cofounder & CEO: Max Levchin, 44, a cofounder of PayPal and former chairman of Yelp

Chime

Headquarters: San Francisco

Digital bank Chime offers no-fee checking accounts with the option to automatically round up purchases and deposit the change into savings accounts. The mobile-only bank offers a debit card, fee-free overdraft protection of up to $100 and access to paychecks up to two days early. 

Funding: $805 million from DST Global, General Atlantic, ICONIQ and others; latest valuation of $5.8 billion*

Bona fides: Passed seven million accounts in January 2020

Cofounders: CEO Chris Britt, 46, who did previous stints at Green Dot and Visa; CTO Ryan King, 43

Credit Karma

Headquarters: San Francisco 

The original free credit monitoring and credit score service has expanded its offerings to include free online tax filing and most recently, high-yield savings accounts. Credit Karma earns fat referral fees for users who bite on its recommendations for credit cards, personal, home and auto loans or auto insurance. 

Funding: $869 million from Silver Lake, CapitalG, Tiger Global Management and others; latest valuation of $4 billion

Bona fides: More than 100 million users in the U.S., Canada and the U.K.

Cofounders: CEO Ken Lin, 44; CRO Nichole Mustard, 47; CTO Ryan Graciano, 38. The trio began working together in 2007, from separate cities. 

Dave

Headquarters: Los Angeles 

With its cartoon bear mascot and “Banking for Humans” pitch, Dave’s $1-a-month app offers users checking accounts with no minimums or overdraft fees; automated budgeting; cash advances of up to $100; and the ability to build up their credit scores through reporting of rent and utility payments to credit bureaus. 

Funding: $76 million from Section 32, Mark Cuban, Norwest Venture Partners and others; latest valuation of $1.2 billion

Bona fides: Five million-plus users, estimated 2019 revenue of $90 million

Cofounders: CEO Jason Wilk, 34, who founded three other startups prior to Dave; CTO Paras Chitrakar, 40; Chief Design Officer John Wolanin, 37

Lively

Headquarters: San Francisco

Digital health savings account platform offers workers access to a fee-free investing (through TD Ameritrade) of the money they’ve socked away tax free for future medical costs. Employers pay $2.95 per worker a month. Lively plans to add flexible savings accounts in late 2020.

Funding: $42 million from Costanoa Ventures, Point Judith Capital, Y Combinator and others; latest valuation of $112 million*

Bona fides: Users have nearly $200 million in accounts, double the amount of a year ago

Cofounders: CEO Alex Cyriac, 37, and COO Shobin Uralil, 37, childhood friends who started Lively after commiserating over hefty out-of-pocket healthcare expenses

MoneyLion

Headquarters: New York 

Digital bank targeting $50,000-income families provides free checking, debit cards, paycheck advances (with direct deposit) and managed ETF portfolios. Paid membership (currently $19.99 a month) adds cash-back loyalty programs, free credit score access and loans designed to build up users’ credit scores.  

Funding: $207 million from Edison Partners, Greenspring Associates, Fintech Collective; latest valuation of $630 million

Bona fides: More than 6 million users

Cofounders: CEO Dee Choubey, 38, a former Wall Street investment banker; CIO Pratyush Tiwari, 43; CTO Chee Mun Foong, 42

Nova Credit

Headquarters: San Francisco 

Draws credit report information from eight countries and produces a standardized “Credit Passport” number (similar to a U.S.  FICO credit score) that allows newcomers to the U.S. to qualify for loans and apartment rentals based on their home-country records. 

Funding: $65 million

Bona fides: In 2019, announced a first-of-its-kind partnership with American Express enabling immigrants from Australia, Canada, India, Mexico and the U.K. to be instantly approved for a U.S. Amex card

Cofounders: CEO Misha Esipov, 32; COO Nicky Goulimis, 31; data science advisor Loek Janssen, 30. The three met while studying at Stanford.

Propel

Headquarters: New York 

Its Fresh EBT mobile app allows food stamp recipients to check their balances without having to call an 800-number. It also allows them to electronically clip store coupons, search job postings and connect to social services. A Harvard Business School case study found users of the app stretched their food stamps a day longer each month.  

Funding: $18 million from Andreessen Horowitz, Nyca Partners, Kleiner Perkins, Serena Williams, Kevin Durant and others; latest valuation of $55 million*

Bona fides: In 2019, doubled its users to two million

Founder & CEO: Jimmy Chen, 32, who left a cushy job as a product manager at Facebook to start Propel

Tala

Headquarters: Santa Monica, CA 

Makes loans ranging from $10 to $500 to developing world customers with little or no formal borrowing history, using their smart phone data to judge risk. (Applicants who pay utility bills on time and phone their moms regularly are more reliable.)

Funding: $200 million from RPS Ventures, IVP, Revolution Growth and others; latest valuation of $800 million

Bona fides: Has made more than $1 billion in loans to 4 million customers. Already profitable in Kenya and the Philippines, Tala is growing fast in Tanzania, Mexico and India

Founder & CEO: Shivani Siroya, 37, who founded Tala after studying the impact of microcredit in sub-Saharan and West Africa for the U.N. 

Tally

Headquarters: San Francisco 

Credit card debt consolidation and payoff app extends a line of credit (at a lower-than-credit-card interest rate) to customers and applies their monthly payment to their existing credit card debts, avoiding late fees and paying off highest interest rate balances first.

Funding: $92 million from Andreessen Horowitz, Kleiner Perkins, Shasta Ventures and others; latest valuation of $285 million*

Bona fides: Boasts a 99% retention rate for users; increased revenue fourfold in the past year

Cofounders: CEO Jason Brown, 40, and board member Jasper Platz, 40. The two MBA  classmates at University of Chicago, Booth, first cofounded a solar finance company in 2009 which was later acquired

Upstart

Headquarters: San Mateo, CA 

Online lending platform uses AI and alternative data such as education and employment history, as well as conventional credit score and income info, to underwrite personal loans. Upstart says 70% of its originations are fully automated and that its approach allows it to hold down losses while lending to those with mediocre credit scores.

Funding: $165 million from Google Ventures, Third Point, Khosla Ventures, First Round Capital and more; latest valuation of $750 million*

Bona fides: Since founding in 2012, platform has been used to generate more than $6 billion in loans to over 400,000 borrowers, funded by five partner bans

Cofounders: CEO Dave Girouard, 53, previously president at Google Enterprise; product head Paul Gu, 29, who made this year’s Forbes 30 Under 30 list; operations head Anna M. Counselman, 39

*Source: PitchBook