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

The young company aims to offer higher annual percentage rates as customers save more….

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

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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.

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:

  • Fetch Rewards, which raised an $80 million venture round;
  • Bumped, raising a $10.4 million Series A; and
  • Paceline, which brought in a $5 million seed round.
  • 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.”

    Illustration: Li-Anne Dias

    Source: https://news.crunchbase.com/news/rewarding-savers-hmbradley-raises-18-25m-to-bank-on-consumer-saving-habits/

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    The Briefing: Fluence Raises $125M For Energy Storage, 23AndMe Gets $82.5M, And More

    Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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    Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

    Subscribe to the Crunchbase DailyFluence gets $125M from Qatar’s sovereign wealth fund at $1B valuation

    Fluence, a joint venture between AES Corp. and Siemens that makes energy storage technology, said Wednesday that it has entered a deal with the Qatar Investment Authority to get $125 million from the sovereign wealth fund through a private placement transaction.

    The investment in Arlington, Virginia-based Fluence, which makes energy storage products for wind farms and other renewable providers, comes at a $1 billion valuation, according to the company. Fluence said it plans to use the proceeds to grow its product offerings and launch in more markets around the world. AES and Siemens will remain major shareholders in Fluence following the deal, each with an approximately 44 percent stake in the company, according to a funding announcement.

    Funding rounds

    Tech news

    • Apple loses copyright case against startup Corellium: A federal judge in Florida rejected Apple’s claims that security and virtualization startup Corellium had violated copyright law with its software, which helps researchers find bugs and security holes on Apple’s products.

    Illustration: Dom Guzman

    Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

    Source: https://news.crunchbase.com/news/briefing-12-30-20/

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    Q&A: Next Coast Ventures’ Mike Smerklo Channels Early Beginnings With Andreessen, Horowitz Into Advice For Entrepreneurs

    Smerklo spoke about his journey, what his children really think he does for a living, and how he pays his knowledge forward to the next generation of entrepreneurs.

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    Mike Smerklo is an entrepreneur, investor and author, applying the decades worth of knowledge he has gained into helping other entrepreneurs reach their goals.

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    He’s had a lot of practice: The co-founder and managing director of Next Coast Ventures was recruited by Marc Andreessen and Ben Horowitz as one of the first employees of their startup, LoudCloud Systems.

    In 2003, Smerklo went to serve as CEO at ServiceSource, a cloud-based apps startup in San Francisco. Over the next 12 years, he grew the business from a 30-person operation into a successful 3,000-person publicly traded company with close to $300 million in revenue. In 2015, he co-founded another cloud-based company, NucleusGrowth.

    He also just came out with a book, “Mr. Monkey And Me,” which provides a look at the mental toughness and grit it takes to start, grow and operate a successful business.

    Smerklo spoke with Crunchbase News about his journey, what his children really think he does for a living, and how he pays his knowledge forward to the next generation of entrepreneurs.

    Note: This interview has been edited for length and clarity.

    Next Coast Ventures’ Mike Smerklo

    What was it like working with Marc Andreessen and Ben Horowitz?

    Smerklo: In my book, “Mr. Monkey And Me,” I talk about my time working with them. I learned so many lessons, but the most salient one was that life is too short to make small plans. The first step in working with the entrepreneurs was the most amazing part. We talked about building something big and meaningful. Marc talked to me about coming aboard. I wanted every advantage I could get, going from the board to hiring people. The experience is like meeting an NFL player. I thought, “Wow, this is what the big leagues look like.”

    What are some lessons you learned that you carried with you into your own company and then into investing?

    Smerklo: Ben said to me early on that a company’s first 25 employees are the most important. I didn’t understand it at the time—I thought that was pretty dismissive to Employee 26. However, the first 25 people are going to set the culture of the organization. After that, those first 25 in the organization are the ones hiring employees, and the founders are not involved in the process as much. Our ability to scale and have the same type of folks go from there changes, so you have to look at every aspect of the business and look at how those employees bring advantages.

    What do you see as the biggest mistake entrepreneurs make?

    Smerklo: There is a mental aspect to being an entrepreneur. One of biggest mistakes starting off is thinking your business is going to suddenly be an Airbnb–worth $100 billion and all of the founders have stories. It’s rare to get to that level, it takes a long time, there are ups and downs, and if you don’t have the right mental stance of how long and what it takes, you won’t get there. Entrepreneurship is underestimated. I watch “Shark Tank,” and that is what my kids think I do for a living.

    We are at an all-time high in the stock market, so valuations are at an all-time high, too, and getting a lot of publicity around it. All of this airtime is doing a disservice to the entrepreneur. Expectations have gotten out of whack in terms of time and valuations. Comparison is the thief of joy, if you get caught up in it.

    With everything that you’ve learned yourself, what kind of wisdom do you like to pass on?

    Smerklo: One of the things I am passionate about is self-care. Outside of practical business, that is a hard job because it is easy to get caught up and keep yourself sane. When people tell me they work 100 hours a week, I see some celebrate that, but not me. Self-care should be part of your routine. When someone is successful, they also have a horrific story, too–something that happened to them. Self-care and mental-care don’t get enough attention.

    Illustration: Dom Guzman

    Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

    In 2003, Smerklo went to serve as CEO at ServiceSource, a cloud-based apps startup in San Francisco. Over the next 12 years, he grew the business from a 30-person operation into a successful 3,000-person publicly traded company with close to $300 million in revenue. In 2015, he co-founded another cloud-based company, NucleusGrowth.

    Source: https://news.crunchbase.com/news/next-coast-ventures-mike-smerklo/

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    Crunchbase

    The Briefing: Graphcore Raises $222M, DXY Closes On $500M, And More

    Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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    Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

    Subscribe to the Crunchbase DailyGraphcore raises $222M for AI microprocessors

    Graphcore, a U.K.-based startup that develops a microprocessor designed specifically for artificial intelligence and machine-learning applications, has raised $222 million in a Series E funding round.

    Ontario Teachers’ Pension Plan led the financing, which reportedly sets a post-money valuation of $2.77 billion for the Bristol-based company.

    The latest round brings total funding to date for Graphcore, which was founded in 2016, to over $780 million.

    Funding rounds

    • China’s DXY lands $500M for online health: DXY, an online health care community for Chinese consumers and health care organizations, raised $500 million in a Series E round led by private equity firm Trustbridge Partners and joined by existing backer Tencent.

    Other news

    • Coinbase to suspend XRP trading: Coinbase said it will suspend trading of the cryptocurrency XRP, following a lawsuit from the U.S. Securities and Exchange Commission last week against Ripple, the company that developed it.

    Illustration: Dom Guzman

    Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

    Source: https://news.crunchbase.com/news/briefing-12-29-20/

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