MoneyLion, the part lending, part savings and part wealth management app targeted at the financial middle class has raised $42M in Series B funding.This brings total equity funding to $67M since being founded in 2013.
The startup provides an all-in-one platform for anything finance related. A user connects their bank accounts and credit cards and then gets personalized advice based on their spending patterns, as well as access to loans to help with fluctuating monthly income and expenses.
Essentially, the startup takes the spectrum of financial services that a customer would typically get from 3 or 4 different banks or providers and rebundles them into one app.
The round was led by existing investor Edison Partners, who has now invested a total of $27M in MoneyLion . Other existing investors like Fintech Collective, Grupo Sura, and new investors Greenspring Associates and Danhua Capital also participated. Chris Sugden, Managing Partner at Edision explained that the firm was attracted to the fact that MoneyLion’s product is targeted at the financial middle class.
“Many traditional financial institutions and fintech platforms cater to super-prime, mass affluent consumers, which is only a small part of the U.S. market. In fact, more than 75 percent of America’s consumers remain underserved by financial services provides. By delivering both a liability and wealth management digital solution on the same platform, MoneyLion brings a complete financial toolkit for consumers who earn less than $100,000” explained Sugden.
A great example – MoneyLion has a rewards program that gives customers points for doing things like connecting a bank account or keeping their credit utilization low. These points can be redeemed for gift cards and other perks, essentially giving American Express-style rewards to middle class customers who may not have a points-earning credit card.
And MoneyLion isn’t only providing financial services to an underserved middle class – they’re also showing that they can make money while doing it. The startup generates most of its revenue from its loan product – it’s originated over 250,000 loans to date to a group of 1.5M total users. MoneyLion also generates revenue via lead generation by recommending other financial service offerings to consumers who may benefit from them.
The startup also recently launched MoneyLion Plus, a subscription service that provides access to lower APR loans and an automated savings tool. While the service costs $29 per month users are refunded $1 for each day they log in, meaning the service is essentially free if users log in every day.