Serial fintech entrepreneur Walter Cruttenden co-founded Acorns with his son Jeff in 2012 with the goal of helping low- and middle-income households invest and save responsibly. The duo wanted to simplify investing for the millions who struggle to start or continue investing.
In 2018 Walter went live with a new company – Blast. With that venture, he wanted to re-challenge traditional banking by bringing personalized financial tools to gamers. In other words, Blast wanted to provide users with a way to save money while playing video games. (Cruttenden apparently acquired some of Acorns’ patents to start this business.)
As 2021 draws to a close, Cruttenden’s newest fintech, Ant Money, is announcing that it has raised $20 million in financing (a mix of previously unheralded seed and Series A capital) and acquired Blast through a stock-for-stock merger.
Cruttenden founded ant money, a micro-income startup, joined Mike Gleason in March 2020. Gleason, who previously founded and sold Consumer Brands, had also previously partnered with Walter to create a data monetization company called Ant Transaction Machines. He serves as CEO of Ant Money.
“While building another company called Ant Transaction Machines and working with Blast, we realized that if we created a common platform we could work faster in terms of our larger mission which is to help people open their first investment account, Gleason said.
That common platform is (obviously) Ant Money. Gleason describes the startup as “a comprehensive, bigger vision that now encompasses three apps and a platform.” The current apps that power investment accounts launched around this time last year: ATM and Learn & Earn.
The merger brings three apps – ATM, Blast and Learn & Earn – under the Ant Money umbrella. The company emphasizes that the move is not a consolidation. Each app persists and functions on its own. explosion will remain focused on gaming. Cash dispenser aims to allow users to earn a micro-income. Learn & Earn is aimed at increasing financial literacy. And all three are aimed at helping users open financial investment accounts.
ATM is specific an app designed to allow users to earn micro income to save money or invest in the stock market through the SEC Licensed “Advisers”, or embedded financial instruments. Ant Money claims that users can earn $100 to $1,000 or more per year from the ATM app based on their level of engagement.
The ATM app started with a “money with your data” angle, but Ant has since toned that down a bit because, according to Gleason, it doesn’t actually sell or even share data at all.
“What we is that we are essentially creating a way for investors to participate in reward programs. So instead of opening an investment account and saying, ‘Hey, here’s some rewards,’ we’re actually going out and saying this is rewards income or advertising and going to invest that,” Gleason said.
Prior to the merger, the Ant Money apps (ATM and Learn & Earn) had more than 500,000 users acquired in the past 12 months. Of those 500,000 users, 100,000 have an investment account.
“We can now go ahead and offer investments to more and more of those 500,000 users,” Gleason said. “Our goal is to end up with a million investment accounts and more than 3 million users by next year.”
Ant Money partners with “very large” companies (some with more than 100 million customers) who offer cash back or rewards or discounts on providing the SDK (software development toolkit) that they can integrate into the investment platform.
“When we think of Ant Money, we see ourselves as the ‘Affirmative of Investment,’” Gleason told BestFitnessBands. “Affirm went out with buy now, pay later and it’s embedded everywhere. We at Ant Money are going out and integrating what we’ve already created and built as a way to open investment accounts. I think that is a very big difference for us from our competitors.”
When I first heard about Ant Money, my first thought was, “Is it an Acorns competitor? Or is it more like Robinhood?”
It’s actually “somewhere between Acorns and Robinhood,” according to Gleason.
Acorns rounds out change, and that goes into ETF buckets to diversify. There is no individual choice of stocks. Robinhood gave the choice.
“And Walter really made Robo Bumpers, which is a hybrid model where the funds flow into ETFs and the investor can then allocate up to 50% of those individual stock picks from our pre-compiled list,” Gleason said. of the portfolio includes five of “the largest, cheapest ETFs in the world,” according to the company, and the other half allows customization of up to 10 individual stocks.)
Coinbase can also be considered a competition as it has used the concept of “Learn & Earn” within its platform to educate investors. And then there’s Public.com, which also brings education and other information to investors.
“I think we’re in the middle of this, but I think we have a big advantage in terms of our ability to open investment accounts with very low customer acquisition costs that are much lower than our competitors, and scale,” said Gleason. Unlike Acorns, Ant Money does not target a specific income group. Users can be as young as 13, but so far the startup is gaining a lot of appeal with younger investors – in the 18-22/23 age range.
Ant Money currently has 55 employees and plans to use some of the new capital to increase its workforce and continue to acquire new customers.
Interestingly, the company’s revenue model is a mix of adtech and fintech.
Ant Money receives indirect income from advertisers and through a monthly subscription fee for the educational component. And finally, some large companies or non-profit organizations sponsor content or classes. For example, Gemini offers sponsored courses on crypto.
“We want to make all of this easy, simple and clear for our investors,” Gleason said.
James Cross, director of Franklin Templeton’s Franklin Venture Partners, believes embedding investment functionality into apps that already pay users rewards or other incentives “is a great way to help young investors get started, and an innovative way for Ant Money to a large customer base with relatively low customer acquisition costs.” His firm led the way, with participation from Steelpoint Capital Partners, Walter Cruttenden, RX3 Ventures and SteelBridge Laboratories.
Gleason declined to say how much Newport Beach, California-based Ant Money paid for Blast, but noted that some of the Series A capital was issued to Blast holders.
In addition to founding several fintechs, Walter Cruttenden also has founded Roth Capital Partners and is the former head of eTrade’s investment bank. Today, he is the chairman of Acorn and Ant Money.
Cruttenden declined to be interviewed due to a quiet period as Acorns is expected to go public, and said in a written statement that he hopes Ant Money, which helps people generate small amounts of money to seed investment accounts, “can open new growing accounts.” promote and provide greater financial security for millions.”