Investment App Builds Its Own Stash
As many times as Internet professionals roll their eyes when they hear of a company that is Uber-like or has Uber-fied an industry, the comparison is sometimes, well, just warranted. Stash Invest is the latest app that has the potential to transform (or "disrupt" if you're still following) an industry and VCs are taking notice.
Stash takes the intimidation out of investing by allowing its app users (so far there is no Web-based user interface) to invest as little as $5 a month and receive recommendations as to where and how to spread their investment (e.g., aggressive vs. moderate, blue chip vs. public works) as well as content to improve their confidence in investing. Stash got a little help of its own today, announcing it has secured $9.25 million in Series A funding, which it plans to use to help accelerate user growth and to build out its technology platform. The round was led by Goodwater Capital, which specializes in early stage consumer technology companies, and Valar Ventures. Entree Capital also participated in the round.
“My cofounder Ed and I left our jobs because we believe everyone should have access to financial opportunity," said Brandon Krieg, CEO. "After a combined 30+ years in the business, we know that Wall Street can be fundamentally unfair to smaller investors and makes it hard for the individual investor to accomplish their goals. We want to create real change the kind that transforms the financial literacy gap and narrows the vast division of wealth that plagues our country.”
The benefits of the app are low fees (check out its app page to get full disclosures and costs) and a way for non-investors to be exposed to the market. Users may, however, be turned off by having to enter their social security numbers into an app (of which the majority of apps across categories are downloaded and deleted quickly) as well as bank information but there's no way around it. It's a best practice - as told by Chase.com - to not sign in using banking credentials to any third-party app, however, of which Stash encourages but does not require (routing and account information can be entered instead). Stash may own some of its growing success to apps like Venmo, which millennials are quite comfortable with - accepting and sending money from/to friends through an app that has had its fair share of criticism concerning security.
While it's likely that the app's drop-off rate comes around the time where users have to enter very personal information, Stash promises it provides bank-grade security and even weekend customer service while investments are managed by experts like Vanguard, State Street and BlackRock. Of course all investments come with risk (read: you may lose money), but Stash's UI, content, touch ID log-in and more, make it an app to watch especially as more funding rounds no doubt come into play and perhaps the bigger investment firms consider acquiring it to expand their millennial reach.