Future of Investing

Stash wants to help millennials invest in their kids

  • Stash Invest is using a new investment to build out banking products
  • For Stash, the objective is not to become a bank, but offer its customers more options to control their financial lives
close

Email a Friend

Stash wants to help millennials invest in their kids

Microinvesting app Stash is doubling its 120-person team to support its move into banking and financial planning products, including those that help its customers invest on behalf of their kids.

It’s using a $37 million Series D funding round led by Union Square Ventures to perfect its new investment account for parents of minors, which launched Monday, and build its checking account it plans to launch sometime this year.

“We’ve always had the same mission of getting people off the sidelines. You can’t just try to build the next JPMorgan,” said co-founder and president Ed Robinson. “We build deep relationships with our customers… but we’re broadening our offering to continue to help.”

Stash’s strategy echoes a wide-reaching trend in financial services, in which single-product companies diversify their offerings to keep a loyal pool of customers, thereby blurring the lines between personal finance, lending and investment platforms. Personal finance apps MoneyLion and Credit Sesame are now offering investment products, for example, and lending startups like SoFi and Marcus by Goldman Sachs have shown more interest in customer checking accounts.

Stash currently has 1.7 million customers, with an average age of 29 and annual income typically under $50,000, and there’s been a “huge” request from them for Stash to help them even more with their financial lives across the gamut, Robinson said.

It’s also going to improve its existing products with the new funding. Last year, Stash launched a retirement savings product and a virtual assistant called “Stash Coach,” which delivers personalized, data-driven insights based on transaction activity similar to the way banks are experimenting with Alexa or Bank of America with its AI-assistant erica. That means Stash is hiring; specifically, it’s looking for new engineers and product and marketing staff, though he declined to specify the plans further.

For investment and personal finance apps, diversifying products keeps customers tied to the platform and it creates cross-selling opportunities. Companies that want to monetize on a single product offering have struggled to grow market share. More and more, the solution to that is to offer a more complete suite of financial products and services, regardless of a company’s entry point.

“There’s definitely that sense that being a full service banking institution is much more fruitful in creating a customer for life,” Luvleen Sidhu, president and chief strategy officer of BankMobile, told Tearsheet last month. “The beauty of banking is every customer is a potential customer. Every person needs a bank and it’s one of those products everyone is in need of so there’s room for ample competition. You have to always look at what value you’re providing.”

But Stash maintains its expansion is just a response to customer demand, based on user feedback.

“We offer education for these users to help them build the right financial habits from day one, and that doesn’t just stop at investing,” said Robinson. “Our mission is to help our users throughout their whole financial lives.”

0 comments on “Stash wants to help millennials invest in their kids”

Future of Investing, Podcasts

Broadhaven Ventures’ Michael Sidgmore on global trends in embedded finance

  • The future of financial services will be driven by non-financial companies that add a financial services layer to serve engaged, frequent users.
  • The pandemic will accelerate the digitization of underlying tech infrastructure and consumer habits, causing long-lasting behavioral shifts.
Suman Bhattacharyya | July 21, 2020
Future of Investing

During pandemic, Personal Capital sees customer inflows, positive feedback for recent rebrand

  • Investment platform Personal Capital rebranded in October 2019.
  • The results of the rebrand, a new marketing campaign, and COVID-19 are all contributing to the firm's growth.
Zoe Murphy | April 23, 2020
Future of Investing

2019: Year of the fintech inflection

  • The fintech market is undergoing changes as investors tweak their strategies.
  • Growth stage companies are seeing a bigger share of the pie, as are emerging markets.
Zoe Murphy | February 19, 2020
Future of Investing, Podcasts

Titan’s Clayton Gardner: ‘We want to make sure we’re building cars, not faster horses’

  • While most robo-advisers have embraces passive investment strategies, Titan has taken a contrarian approach.
  • Its clients turn to the investment app for reasonably-priced hedge fund strategies.
Zack Miller | October 28, 2019
Future of Investing

JMP Securities’ Devin Ryan on the impact of free trading on financial services

  • Over the past few weeks, major brokerages have eliminated brokerage fees.
  • Devin Ryan, MD at JMP, joins us to discuss what the future of financial services looks like.
Zack Miller | October 21, 2019
More Articles