Sequoia-backed startup Empower aims to replace your bank’s app
Empower, a startup looking to help millennials better manage their finances, is today launching its mobile app for iOS devices. The new application combines the ability to see an overview of your day-to-day transactions and spending behavior, with other tools to transfer money between accounts, automate your savings, and soon, pay bills and pay down your debt.
The ultimate goal, explains Empower’s founder Warren Hogarth, is to have Empower be able to fully replace your bank’s app.
“We want to help you take action to get ahead – without you having to exit the app, go to your bank app, remember you password, move money around…[with Empower] from one place, you have control of everything,” he says.
Prior to starting Empower around a year ago, Hogarth had spent the past seven and a half years as a partner at Sequoia, where he saw first-hand how modern fintech startups were helping changed the way people approached managing money, payments, and investing. Sequoia has backed a number of top fintech players, including Square, Stripe, Prosper, Klarna, FutureAdvisor, and SunRun, for example, and Hogarth led the investments in the last two himself.
Having this bird’s-eye view into the market helped Hogarth see a niche that could still be filled, he explains.
“No one really has been able to crack the nut in building the one app on your homescreen that consumers use to manage their money,” says Hogarth.
One of the bigger companies in this space was Mint, which has been around for more than a decade and wasn’t built with a mobile-first mindset.
In addition, Empower isn’t just pulling in data from banks and other financial firms – it has partnered with the providers, and then performs in-house data cleaning and structuring to help the data make sense to end users.
To get started, you search in the app for banks and financial firms where you have accounts, then login to add them to Empower. The company uses strong encryption and claims it sets a higher bar on security because it’s audited by its financial partners. (Says Hogarth, data is 256-bit AES encrypted at rest, 256-bit SSL encrypted at transfer, and stored in PCI-compliant environment; user credentials aren’t stored).
Once your accounts are added, Empower can show you where you’re spending your money broken down by category, or alert you if you’re spending more than your pre-configured limit. You can categorize transactions it hasn’t been able to identify itself, and this will contribute to a crowdsourced database of transaction categories – meaning, the app’s ability to identify your transactions will get better in time, as more people use it.
Of course, some banks already offer reporting and analysis tools built into their own apps, but Empower aims to do more in time.
At launch, it can facilitate transfers between any of its over 1,000 supported banks, and will allow you to set aside a percentage of your paycheck through an auto-saving feature. There are a number of apps out today that can also aid in automating your savings, like Digit, Oval, Clinc, Acorns, Albert, Qapital, and others. However, Empower doesn’t attempt to set up its own white-label savings account – it lets you transfer money into an account you already operate.
The app also competes with a variety of others that offer to give you a fuller view of your financial health – including Albert, Prosper Daily or Level Money, for example – but doesn’t yet have some of the more in-depth analysis and charting or intelligent push notifications of its rivals. But it expects to grow its toolset in time, and plans to offer features that will help users pay down student loans, transfer funds into high-interest savings accounts, and will make suggestions about loan products that could save you money through refinancing debt.
Empower may also suggest later that users use their excess cash to make investments, but will not make investment advice itself – though it may work with robo-advisers in the future on those efforts.
The San Francisco-based team of five also includes co-founder Justin Ammerlaan, whose background involves building software for financial institutions.
The company has raised an undisclosed round of seed funding (not surprisingly) led by Sequoia.
The Empower app is a free download on iTunes. An Android version is a few months out.