Imagine if saving was as easy as spending.
This is what George Friedman and Erik Akterin had in mind when they co-founded Qapital, a banking app that helps users save money for specific goals using automated steps and commands. The idea behind this platform is to help people reach financial goals, like saving for a trip or a wedding, without them having to change daily spending or behavioral habits.
Setting up Qapital is fairly simple: Users connect their primary U.S. bank account and set up saving criteria like, “if a coffee is $2.50, round up to $3.00, saving $0.50 to my FDIC-insured capital account,” or “every time I visit my mom, put $5.00 into my new guitar fund.”
In addition, Qaptial offers a checking account and Visa Inc V debit card, the Qapital Visa®, issued by Lincoln Savings Bank. The card allows for payments, immediate transfers to and from Qapital Goals and direct deposits.
Benzinga recently spoke with CEO George Friedman and asked him to walk us through the model and future plans.
“Setting up Qapital criteria makes you think about tradeoffs in more concrete ways; and that’s what money management is all about, a tradeoff between spending and spending on tomorrow, which is saving,” he said. “It’s not enough to create a smoother, more visually pleasing, slightly more sexy banking experience. It has to be deeply rooted in behavioral science.”
And it really works, he added, pointing out that the app serves about 300,000 savers and has helped people save about $230 million already.
“We are basically structuring a complete financial platform around your goals, and not your accounts,” Friedman noted, when discussing the checking account and Visa card. “That’s the way people should think about money, in our opinion,” he added.
Qapital is available for Apple Inc. AAPL mobile devices and Alphabet Inc GOOGL GOOG’s Android, as well as desktop computers, and can be downloaded and used for free.
Revenue derives from transaction fees on each card swipe; it’s the merchant, and not the customer, who pays this fee. At the time, the company doesn't disclose revenue due to its private status and venture capital backing.
Even though management is looking at markets outside the U.S. for potential expansion, they remain focused on the domestic market for the time being.
Back in March, Qapital closed its $12 million Series A funding round with capital from Industrifonden, Northzone, Rocketship VC and Anthemis Exponential Ventures. Friedman and his team are planning a Series B round in the near future, although it will also likely be completely subscribed by venture funds, the CEO said.
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