Investing app Stash raises $65M, launches banking and ‘stock-back’ rewards with Green Dot

Stash, the fintech startup and app that aims to introduce new people to the world of investing, is unveiling some interesting new services while also announcing that it has raised more funding to expand its business. The company is introducing mobile-based banking accounts from Green Dot Bank, and, alongside it, a new rewards program called “Stock-Back.” When users spend money using their Stash accounts, they get “points” — which are either stocks in the companies where they are buying goods, or shares in ETFs approved by Stash. On top of that, Stash also said it raised a Series E of $65 million that it will be using to grow its business on the back of these two launches.

A spokesperson for the company said that Stash is not disclosing the full round of investors in this round. For context, Stash was valued at $350 million post-money in its Series D, according to figures from PitchBook, and a source says the valuation is now “much higher” than that of a straight upround.

But from the looks of it, the $65 million appears to include participation from Breyer Capital, a previous investor whose founder Jim Breyer has heartily endorsed the new Stock-Back service and accompanying loyalty program that’s tied in with it, which was tested early with companies like Netflix, T-Mobile and Chipotle all offering stock when people used their Stash accounts to pay for goods and services at the companies.

“I have invested in and served on the Board of many leading companies, and it’s clear how a program like Stock-Back can power immense brand loyalty,” he said in a statement today. “The early data shows unequivocally that share ownership drives increased sales and customer appreciation. This innovative new technology from STASH will have CEOs and CMOs knocking on their door.”

From what we understand, the round was led by a private institutional investor and includes 40 percent existing and 60 percent new investors. Previous backers in addition to Breyer include Union Square Ventures, Coatue Management, Entree, Goodwater and Valar. “We’re really excited and proud to be working with this incredible group of VCs,” the spokesperson noted.

The Green Dot-powered banking service comes with the core features that will sound familiar to those who have used or looked at next-generation banking services before. It will include a debit card-based account, no overdraft or monthly maintenance fees, access to a network of ATMs that can be used for free and direct deposit services, as well as “personal guidance” for their financial planning activities, from saving to investing.

Stash is part of a wave of fintech startups — others include the likes of Robinhood, Acorns, YieldStreet, Revolut and many others — that have tapped into the popularity of apps and the advent of new financial services technology to democratise how individuals can save, spend, invest, borrow and lend money, moving many of those operations and transactions out of the hands of the big incumbent players who used to control them.

The average age of a Stash user is 29 and average income is less than $50,000 per year, and tying in transactions made using Stash’s banking service — by way of reward points that are being picked up incidentally — will make it even more seamless for these users to take some of their money and invest with it, while at the same time demystifying some of the process and making it more likely that those users will choose to invest even more down the line.

The idea of tying investments to what you are actually purchasing is a clever one. For a startup whose user base includes no-nonsense professionals from fields like teaching, nursing and retail, this is the embodiment of putting your money where your mouth is — literally speaking, as the investments can include things like shares in Chipotle each time you buy food there, and T-Mobile every time you pay your phone bill for all the talking you do.

Stash is positioning Stock-Back as a rewards program, with the percentages varying by business or brand and going as high as five percent in Stock-Back in some cases — as is the case, at launch, when people use their Stash debit cards to pay their Spotify and Netflix dues.

Ultimately, the aim of this is to present a way for ordinary, modestly-salaried people not only to potentially make money, but to be better engaged in how financial systems work, and how their daily actions impact that — the idea being that this knowledge can only help them in the long run.

“80% of Americans are living paycheck-to-paycheck. Stock-Back is our way of utilizing STASH’s smart, patent-pending technology to help people build better financial habits and invest in their future,” said co-founder and president, Ed Robinson, in a statement. “Our ability to give customers the opportunity to save and build portfolios that mirror their spending behavior and preferences is incredibly powerful.”

Pluto is travel insurance aimed at millennials

Pitched as “travel insurance for people who don’t like insurance,” U.K.-based Pluto Insurance is officially launching today with an online travel insurance product targeting millennials.

Citing research that says 40 percent of millennials don’t actually buy travel insurance, mistakenly believing that it isn’t required, the mobile-first offering not only attempts to demystify travel insurance, but is also unbundling it in a way that ensures you only pay for the cover you need or desire.

“We’ve spoken to hundreds of millennials and three things keep coming up,” says Pluto co-founder and CEO Alex Rainey. “Travel insurance is too complicated and it’s hard to know what you’re actually buying. Secondly, a lot of younger people don’t think they need it. But most importantly, there is a distinct lack of trust towards insurers, and it’s easy to see why. With exclusions buried in the fine print and insurers expecting people to print out a claim form and post it in.”

To remedy this, Rainey says Pluto wants to make travel insurance more tailored, letting you build your own policy online. “We work hard to make sure everything is easy to understand, ensuring we always explain our cover in plain English,” he says. The startup also lets you submit a claim via the mobile web app “in under 10 minutes.”

Insurance options includes gadget cover, baggage cover, cancellation cover, level of excess, cover for certain activities and travel disruption. As you add more cover, the price of your insurance changes in real time with each decision. Once you’ve built your policy, a short summary of your cover is displayed before you go ahead and purchase.

Meanwhile, the insurance itself — which, at launch, doesn’t cover pre-existing conditions, although that will be offered in the future — is in partnership with Zurich, which Rainey says was chosen because they had a 99 percent claims payout rate in 2017. “This is so so important for us to solve the trust issues in insurance,” he adds.

To that end, Pluto integrates with Facebook Messenger, including letting you use the messaging app to start a claim. You can also search your policy, check a summary of your cover or chat to a Pluto team member.

“Our customers want to do everything from their phone, when and where they want. We’ve made sure that’s possible,” says Rainey.

Instacart’s alcohol delivery is now available in 14 states

Instacart has expanded its alcohol delivery to now be available in 14 states and Washington, DC from nearly 100 different retailers.

With the roll-out, Instacart alcohol delivery is currently available to 40 million homes in the U.S., and the number of alcohol deliveries on the platform has more than doubled since the same time last year.

Partners who participate in alcohol delivery on Instacart include Albertsons, Kroger, Publix, Schnucks and Stater Bros., alongside wine and liquor stores such as BevMo!, Binny’s Beverage Depot and Total Wine & More.

The list of states where Instacart offers alcohol delivery include California, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Minnesota, Missouri, North Carolina, Ohio, Oregon, Texas, Virginia, Washington and Washington, DC.

Instacart started rolling out alcohol delivery a year ago, and has quickly become a competitive player in the space. Postmates introduced alcohol delivery in 2017, whereas strictly alcohol delivery services like Drizly, Minibar and Saucey have been around for a while.

Here is what Instacart’s chief business officer, Nilam Ganenthiran, had to say:

Part of grocery shopping for many people goes beyond getting fresh produce, meats and pantry staples, and includes picking up the perfect bottle of wine for a dinner party or their favorite beer to sip while watching the big game. By working alongside our retail partners to add alcohol to the marketplace, we’re offering customers more choice and making it easier for Instacart to be their ‘one-stop-shop’ to get the groceries they need – including beer, wine and spirits – from the retailers they love.

When Amazon bought Whole Foods in 2017, some speculated that Instacart might be hit hard. But the deal also represented the digitization of a massive, traditional industry. Considering Instacart’s retail partner growth over the past year, it seems that the Whole Foods acquisition might have made Instacart an attractive platform for some retailers.

The company now serves more than 80 percent of U.S. households, which was Instacart’s stated goal for the end of 2018. Across its 300 retail partners, Instacart now delivers from 20,000 grocery stores across 5,500 cities in North America.