Mobile Banking App Empower Raises $20 Million
Following a near-record 2019, FinTech has been off to a strong start in 2020. The latest example of this is Empower. The San Fransico-based firm recently announced that it had raised $20 million. The Series A included participation from Defy Ventures, Icon Ventures, and Nubank founder David Velez. Additionally previous investors Sequoia Capital and Initialized Capital joined the latest round.
Although there are several budgeting and banking apps on the market today, Empower looks to stand out by combining AI for recommendations and analysis with human coaching. The latter allows users to get answers to their most-pressing personal finance questions, better allowing them to navigate their money. Currently users can enjoy these features and many others for a monthly fee of $6 — although the app also offers a 30-day free trial.
Two other notable aspects of Empower is their high-interest checking account and automated savings. Not only do these accounts carry no minimum balance requirement or charge overdraft fees but are currently offering 1.10% APY (previously 1.60% APY prior to the Fed’s emergency rate cut).
Discussing Empower’s impact and goals, co-founder and CEO Warren Hogarth said of his company, “Empower is democratizing access to financial experts and products that used to be available to only the top 1% wealthiest people.” He added, “There’s growing demand in the market for financial knowledge to be more practical – and that means actionable, personalized information in real time to create better outcomes.” Meanwhile Tom Mawhinney of Icon Ventures reflected on what makes Empower different, saying, “Today’s generation needs and wants more from their bank. Most challenger banks are trying to tackle small parts of a more significant problem, like minimizing fees or early direct deposit or improving design.” Mawhinney continued, “Empower has a broader mission to improve financial well-being and independence through personal impact – and that means giving people a complete toolset incorporating digital plus human mentorship to save more and make their money work harder. The company is unlocking possibilities on a whole different scale.”
Even in an increasingly crowded space, Empower does seem to offer something different. Needless to say, their impressive $20 million Series A further emphasizes the growing power this app could have. At the same time, Empower does once again follow a few trends we see often in FinTech. This not only includes money tools expanding into other areas of finance but specifically the interest in offering banking services such as checking and savings. Nevertheless the app seems well positioned to make a splash and hopefully help a new generation better manage their money.