It's Time for Smart Money
The news: Activant Capital and L Catterton are co-leading a new $60 million fundraising round in Eco, just months after our $26 million fundraise announced in March. They’re joined by many of our existing investors, including a16z Crypto, as well as a number of new faces: Lightspeed Venture Partners, LionTree Partners, Valor Equity Partners, and dozens of others.
We didn’t expect to be writing an update like this so soon after our launch in March. But a lot has happened in the 4 months since. We introduced Eco’s all-in-one wallet for saving and spending to the world and set to work getting people to consider a simple yet fundamental question: why, in a world with “smart” everything — from toothbrushes to doorbells — is our money the one thing still so dumb?
What's Smart Money?
Think about it. Why do we have checking accounts and savings accounts? Is there any difference besides the name when they both pay nothing? (As it turns out there is one difference: you can only withdraw out of your savings account a few times a month). Why do many of us spend with credit cards — a debt instrument? Why do we have a different app for every little thing we do with our money? Doesn't this just set us up to make bad decisions, and make it harder to keep track of everything, setting us up to make more bad decisions...on repeat? Why does it take 3-5 days to send money… even to yourself?
You’ve likely run into a head-scratchingly inconvenient situation thanks to the system behind these questions—and if you’re part of the vast majority of people who live paycheck-to-paycheck, this is way more than a minor pain point. This complexity is an accident of history emerging from misaligned financial incentives and outdated infrastructure. The result is that everyone delivering services through this “dumb money” system benefits when the consumer loses — capturing fees and upside with each dollar spent or deposited, which compound enormously over time. And no one has the incentive to make it much better, including the supposed innovators.
Leading people to discover this massive secret hiding in plain sight (which nearly everybody intuitively understands is real) primes them to see Eco differently. Eco delivers a new standard of “Smart Money”. How? By building its financial tools and services on better infrastructure, operating with a business model fully aligned with customers (making money only when they do), and delivering it all through a top-tier product that meets them where they are.
Instead of dealing with a fragmented landscape of financial apps, Smart Money means having all your money in one simple place, without fees and without business models that take money out of your pocket. It means having a partner that won’t ever sell your data to pad its margins. It means using a product that rewards you any time you do anything — save, spend, or send. Smart Money means your money is working for you — every time you do anything, and over time even while you do nothing.
By delivering on all three of Smart Money’s foundations — infrastructure, alignment, and product — Eco is a bridge to the future, today.
If you'd like to join this Smart Money movement, sign up — or read on for more.
Until seeing the data flood in from 180,000+ people on Eco’s waitlist and working through intimate customer onboarding sessions, it was impossible to know how badly people needed Eco. While people may first come to Eco for the headline benefits of high APY (2.5-5%), high rewards (5% cashback) and no fees, it’s in the one-on-one onboarding that they first come to understand just how bad their current banking relationship is — from the upfront costs and lost interest to the long-run, nearly-imperceptible costs accruing from an antiquated middleman-centric system.
Once we help people across that gap in understanding, they realize the power of Eco — and use it differently than any other product on the market. Already, we’re seeing average deposits over 19 times higher ($7,700) than neo-banks (around $400). Most notably of all, over 88% of newly onboarded customers express interest in depositing part of their paycheck with Eco and over 60% want to deposit the bulk of it, which is almost unheard of. And thanks to viral referrals driven by the promise of still higher APY — and Eco Points — we’re seeing customers come in faster than we can serve them.
While we’ve been taken aback by the outpouring of interest in Eco, it probably shouldn’t have come as quite such a surprise. Consumers are facing dismal choices at the moment — even the most innovative alternatives in traditional banking only address a single dimension of Smart Money, at best. They fix the infrastructure, the alignment, or the product — but not all at once. Eco combines all three — better financial infrastructure and better financial alignment and a better financial product.
Where we're going next
In light of the traction Eco is getting with its Smart Money strategy, and the sad market reality for nearly all banking consumers, Activant Capital, a leading growth-stage fintech venture fund, and L Catterton, the top consumer-facing investor in the world, decided to lead this new $60 million round.
“Activant partners with companies building and enabling the infrastructure of tomorrow. Through its elegant all-in-one digital wallet, with no fees and high APY and rewards, we believe Eco has landed on a value proposition to drive momentum toward a 'Smart Money’ revolution that sees people consolidate their accounts with a single, trusted partner who delivers superior terms and user-first technology. Eco is uniquely positioned to reshape consumer finance from the ground up and we're thrilled to support Andy and the team in this next phase of the journey.”
— Steve Sarracino, Founder and Partner at Activant Capital
“L Catterton focuses on categories and businesses with strong tailwinds underpinned by consumer trends and where consumers, and their dollars, are headed next. We took note of the groundswell of interest in Eco that emerged following its beta launch in March. Our research indicates Eco is addressing a domestic market opportunity of 50M+ digitally savvy consumers who pride themselves on good stewardship of their finances but, yet, don’t realize the real costs — in fees and lost purchasing power — of their current banking relationship. When those costs become clear, we believe they will migrate in large numbers to Eco, won over by the exponentially better rates, no fees and user-centric tech offered by its ‘Smart Money’ model.”
— Michael Farello, Managing Partner at L Catterton
When the market signals its belief in what you’re doing, you respond by working to serve more people. When a community rises up around your product with the makings of a historic consumer movement, you do all you can to honor and fulfill its belief.
Ultimately, the success of any bold vision rests on foundations of belief. A beautiful reality is that with everything we accelerate — building new use cases and services, expanding merchant partnerships, scaling the App, and more — that belief strengthens. This isn't about hype: it's about a deeply-held trust from users that Eco can deliver a better financial future for them in full alignment with their interests. It becomes a self-fulfilling prophecy.
In such a system, when the community pulls you ahead of schedule, you listen to them. With this new funding and strong demand coupled with market fit, Eco will seize this opportunity on behalf of its community — present and future.
Because, above all else, Eco believes your money can work for you.
For more information on Eco’s Smart Money promise and what it means for you, sign up here for our first ever Eco Explore event, taking place virtually on August 18, 2021.
Or, if you're ready, sign up for Eco
Sign up for Eco