MoneyLion announced today that it has raised $160 million as part of a Series C financing. Capital One joined this round as a strategic investor in the challenger bank. MoneyLion didn’t disclose valuation of the round.
Big banks and challengers: This is the first time Capital One has invested in a challenger bank. Capital One is an investor in Dave, a personal finance tool that recently launched banking products.
“Having financial and strategic investors like these validates the idea that we’re a pioneer in subscription finance,” said Dee Choubey, founder and CEO of MoneyLion. “The way of the future to service the entirety of hard working Americans is through the subscription model.”
Though he didn’t cite anything specific, with similar data-driven approaches to building products for consumers, the door is open for future collaboration with Capital One, Choubey said.
Use of proceeds: MoneyLion plans to use this financing to rapidly grow its existing footprint within the US and launch new products.
Geographic expansion: MoneyLion believes it’s built a product for everyday Americans and it wants to reach more of them as it’s evolved from a PFM into a full-blown challenger bank.
- MoneyLion’s partnership with Nascar, Penske and Univision, for example, were intended to reach more people in its target demographic in the heartland of America.
- “We’ve made a big investment in communities,” said Choubey. “We’ve invested in NASCAR to help us spread the message of the powerful tools we’ve built for everyday Americans. NASCAR has one of most vibrant sports communities — 80 million strong. The coasts are great but our products are built for all of America.”
- The firm is looking to ink more partnerships like the one it created with dfree, a lifestyle movement that promotes financial freedom through values-based principles and practical approaches to financial management.
- To acquire new customers, alongside its partnerships, MoneyLion uses FB and other online channels to target its audience.
New products: The average MoneyLion member uses the app 60-70 seconds daily, making it one of the most highly-engaging financial apps in the US, Choubey said. “We’ve taken the social media use case and brought it into financial services, demystifying the stress and fear around money and made it bit-sized in a holistic platform,” he said.
MoneyLion has a variety of new products in its pipeline.
- Pay advance: It’s revamping its Instacash 0% APR cash advances which are part of its Core Membership product.
- High yield savings: The challenger bank is also working on a high yield savings product that is intended to help members save for unexpected bills.
- Trading and investing: In Q4 of 2019, MoneyLion is planning on rolling out a new trading platform for members to trade individual stocks and buy and sell fractional shares. For a large portion of the community (94 percent), it’s their first time trading stocks.. The firm plans on leveraging the power of the community to help new investors learn and participate in stocks.
As part of the launch of the trading product, MoneyLion will introduce its own FINRA-registered broker dealer.
“We heard our customers and based on feedback, a portion of our members want self-directed investing capabilities,” said Choubey. “Product elegance comes with integration. So, once we had the conviction that our members wanted to trade stocks, we set out to see if we can the maintain same level of engagement that we have in our other products.”
“It makes sense for us to build our own broker dealer based on the value it provides to our overall membership.”