Mobile Banking App Company Empower Raises $20 Million

By Dan Anderson ● March 7, 2020
  • Mobile banking app company Empower announced it has raised $20 million in Series A funding

Mobile banking app company Empower announced it has raised $20 million in Series A funding. This round of funding included participation from new investors Icon Ventures, Defy Ventures, and David Velez (Founder and CEO of Nubank). Existing investors Sequoia Capital and Initialized Capital also joined this round. Empower was founded in 2016 in San Francisco by Warren Hogarth (CEO) and Justin Ammerlaan (CTO).

What does Empower do? Empower is known for creating a unique consumer banking experience combining artificial intelligence and human coaching for powering a suite of personal finance solutions, including high-yield deposit products, easy budgeting, spend tracking, bill negotiation and subscription management, and personalized recommendations to make better financial decisions.

This funding round comes on the heels of the company’s successful launch of high-interest checking and automated savings accounts at 1.60% APY with no minimums, no overdraft fees, and unlimited withdrawals.

Empower’s digital intelligence is complemented by human coaching to guide customers through more difficult or unique financial challenges that millennials face, including planning for retirement while managing student loan debt. And Empower is investing in data science as well as a team of financial experts who are on standby to help customers navigate the more complex questions for their specific circumstances. The human coaches are millennials and well-versed in money management across credit, loans, investments, etc. The objective is to deliver tangible and positive outcomes while giving people greater agency and confidence as they navigate their financial life.

A Gallup poll reported that when millennials become unhappy or dissatisfied with their bank, they are not afraid to make a change and are 2.5x more likely than Baby Boomers and 1.5x more likely than Gen Xers to switch banks.

Key Quotes:

“Empower is democratizing access to financial experts and products that used to be available to only the top 1% wealthiest people. There’s growing demand in the market for financial knowledge to be more practical – and that means actionable, personalized information in real-time to create better outcomes. We combine human coaching with the latest technology, including AI, to continuously monitor our customers’ accounts and provide intelligent alerts, prompts, and analyses to improve their financial decision-making in the moment and build financial literacy. We’ve designed every product feature to make it dead-simple to save more and grow their wealth.”

-Warren Hogarth, Co-Founder and CEO of Empower

“Today’s generation needs and wants more from their bank. Most challenger banks are trying to tackle small parts of a more significant problem, like minimizing fees or early direct deposit or improving design. Empower has a broader mission to improve financial well-being and independence through personal impact – and that means giving people a complete toolset incorporating digital plus human mentorship to save more and make their money work harder. The company is unlocking possibilities on a whole different scale.”

-Tom Mawhinney, General Partner at Icon Ventures

“There is a considerable body of research that says Millennials are financially behind and actually worse off than preceding generations. While we obviously need to address the systemic problems, Empower is designed to help this generation get smarter and savvier about their money. It’s pretty rare to find a consumer bank that offers high yield on all your money without the traditional deposit restrictions, plus on-demand financial coaching via both human and AI assistance. Empower is the practical all-in-one solution that’s been missing in the market.”

Alexis Ohanian, Co-Founder and Managing Partner at Initialized Capital and customer of Empower