- Zero Financial announced it raised $20 million in Series A funding led by New Enterprise Associates (NEA)
- With this round, Zero has raised $35 million total
Zero Financial has announced it has raised $20 million in Series A funding led by New Enterprise Associates (NEA) — which allows the company to scale to the more than 200,000 people on its waitlist over the next few weeks. And this brings the total equity and debt funding to date to $35 million from NEA, SignalFire, Eniac Ventures, Nyca Partners, and Silicon Valley Bank.
What makes Zero unique is that it allows you to “bank like debit and earn like credit.” And it is considered a replacement for your old school bank as it is built by combining a rewards credit card known as Zerocard and an FDIC-insured checking account called Zero Checking.
“Apple recently made headlines by saying they’re launching the first credit card that encourages you to pay less interest,” said Zero founder and CEO Bryce Galen. “I think we’ve done one better and launched the first credit card that encourages you to pay no interest.”
The debit-style experience displays transactions from Zerocard and Zero Checking together in the Zero app with one net number to spend from. And customers also get the benefit of a system that prevents unplanned and unwanted overspend.
“If you’re someone who spends $30,000 a year and maintains an average of $30,000 in deposits, you’ll earn $0 in cash back and interest with a typical debit card and non-interest bearing checking account, and $1,425 a year with your Zerocard Carbon,” added Zero founder and COO Joel Washington. “And it takes just a few minutes to sign up.”
The transactions are enhanced with logos and maps, which makes it easier to recognize purchases. And Zero’s support team is available with 24/7 support out of its operations in California.
Zerocard is a World Mastercard so it earns credit card cash back. Customers start with a Quartz level card, earning 1% cash back on purchases. And as they refer other people to join, then the customer gets a higher level card called Graphite (1.5% cash back on all spending categories). When two friends are referred, customers get a Magnesium level card (2% cash back on all spending categories). Four gets a Carbon level card (3% cash back on all spending categories). In order to receive the full cash back rate at the Graphite, Magnesium, and Carbon levels, the Zerocard full statement balance has to be paid by the due date from the customer’s Zero Checking account.
“Few people understand how complex it is to launch a credit card or a checking account program,” explained NEA partner Rick Yang. “Zero is the first US startup to launch a fully integrated and elegantly designed product with both from scratch. Importantly, Zero gives consumers the ability to fully control and understand their own spend, without compromising on rewards — something that traditional account options have failed to provide.”
Zero partnered with Salt Lake City-based WebBank for issuing Zerocard. And deposits are held at Evolve Bank & Trust (a Memphis-based bank and Member FDIC) and insured up to FDIC limits. And Zero doesn’t charge annual fees, ATM fees beyond what the ATM owner charges, foreign transaction fees, minimum balance fees, overdraft fees, or many of the other fees that happen with typical bank accounts.
