Yet-to-launch Moneybox is a U.K. startup that wants to encourage millennials who might not be thinking too much about their financial futures to save and invest.
It reckons the key to this is a mobile app that reduces the friction inherent with opening a stocks and shares ISA (Individual Savings Account) and perhaps ingeniously lets you round up your ‘spare change’ from everyday card transactions to deposit in your tax-free Moneybox savings account.
To help bring its app to market in the next few months, the company has closed a $3 million seed round. Backing comes from Samos Investments (which previously invested in the likes of Betfair and Ocado) and various unnamed angel investors. The funding will be used to expand the core team to around 20 people, and for the development of the Moneybox app ahead of an “early 2016” launch.
Moneybox is also disclosing that Daniel Godfrey, former chief executive of The Investment Association (IA), the representative body for the UK’s £5.5 trillion investment management sector, has joined as an advisor.
That’s perhaps noteworthy considering that Godfrey was reportedly ousted from the organisation for being too consumer-friendly, rather than exclusively championing the interests of the investment industry. In particular he wanted to bring greater transparency to various investment and saving products — something that Moneybox says it’s aligned with.
My understanding is that Moneybox co-founder and CEO Ben Stanway reached out to the ex-IA chief executive after reading about his departure and that Godfrey had been advising the startup informally prior to the arrangement being made official. Going forward he’ll be helping Moneybox navigate the regulatory authorisation process and with product design.
As for how the Moneybox app will work, Stanway tells me you’ll be able to set it to automatically or manually round up card transactions to the nearest pound to be invested in your ISA. This total will be added up each day but deposited on a weekly basis. Transaction fees and legacy banking infrastructure prohibit these ‘micro’ deposits happening in real time.
The only other catch is that you’ll have to log in via your credit card or Internet banking credentials — with Yodlee providing the tech behind this — in order to authorise Moneybox having read-only access to your transactions and to link your credit or debit card to the app.