Citi Ventures and RRE invest $11 million in Clarity Money

The battle between personal finance apps just got a little hotter today with a major investment in upstart Clarity Money. Citi Ventures, the venture capital arm of Citibank, and venture capital firm RRE Ventures announced an $11 million Series B funding round for Clarity Money, an artificial-intelligence powered personal finance app that launched just this year. Led by Adam Dell, brother of Dell founder Michael Dell, the app connects to customers’ bank and credit accounts and suggests ways they can save money by helping users cancel unwanted recurring expenses. It also lets customers save for specific goals. “The reason we made the investment is that we didn’t see any others that were able to advocate and create the value like Clarity did,” said Stuart Ellman, managing partner at RRE Ventures. RRE was an early investor in Clarity and has a number of prominent finance and technology companies in its portfolio, including Nerdwallet and OnDeck. RRE was also a seed investor in Venmo. Clarity Money launched in January of this year and claims it has 100,000 users. But with a proliferation of personal finance apps on the market such as Mint, Digit and Quapital, investors are interested in Clarity Money because of its focus customer advocacy based on data analysis. Dell said Clarity Money’s value derives from its ability to deliver a personal finance overview a step further with concrete, achievable steps. For Citi Ventures, the use of APIs to improve the consumer banking experience was an important factor in influencing their decision to invest in the company. “The PFM [personal finance management app] market is crowded and building a successful consumer app comes with challenges, but we believe that Clarity’s application of machine learning and behavioral science is a unique and competitive offering,” said Luis Valdich, Managing Director at Citi Ventures. Financial technology is a focus area for Citi Ventures, whose portfolio includes Square, Betterment, BlueVine and FastPay. Banks’ partnerships with startups such as Clarity are becoming a key innovation channel for major brands such as Citi. Though no formal partnership arrangements are currently in place, the Citi Ventures is open to future arrangements. “We think there will be opportunities to partner with them in the future, and we are exploring those options,” said Valdich. While some may argue that the personal finance app market is already saturated, Ellman said that customer experience and ease of user interface are what will ultimately drive success. “After twenty years of dot com and the web, there are no completely white spaces that I can think of,” said Ellman. “It comes down to whether you have a better product and if can you execute better than the other people in the area that you’ve chosen.”