Fintech startup The Beans raised $2 million in funding to continue developing its automated financial wellness and behavioral offering for people labeled “America’s Caring Class,” those with steady income streams in professions, including teachers, nurses and social workers.
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“I started my career as a teacher in New York and also working in nonprofits, and I observed that everyone working with me was stressed out about money,” The Beans founder and CEO Melissa Pancoast told Crunchbase News. “It wasn’t just us, but the parents of the children we were teaching.”
Pancoast went back to school to study financial behavior, and ended up leading a team as a researcher in the University of Oxford’s Centre for Evidence-Based Interventions. She developed the “Economic Strengthening” program that was proven effective in reducing financial stress and abuse in families.
The program was later rolled out to 77 million families around the world as part of the emergency response to COVID-19 by organizations, including the Centers for Disease Control and Prevention, the World Health Organization and the United Nations, she said.
When she moved to the Bay Area and was hit with her own student loan debt, Pancoast admitted that she was astounded by it. She used spreadsheets to manage everything and began to feel stressed.
“People talk a lot about financial stress, but not what actually reduces it,” she added. “We are looking at what we can do through products, to learn how people think and feel about money.”
She launched San Francisco-based The Beans in 2017 with data in mind. Pancoast and her team created their own machine-learning models designed for behavior change.
The product has three principles: Having a financial plan makes you 10x more likely to succeed, having savings improves decision-making — and it doesn’t have to be a six-month nest egg, either, she said, just something that is achievable — and spending money in alignment with your values.
“The Beans’ unique visual financial planning shows you all of your resources and enables you to divvy them up across categories so you can discover if you have enough money,” Pancoast said. “If you are in a good position, you can even play around with where your money can go.”
Pancoast estimates that 40 million people have a career in what is considered the “caring class,” though there is debate that raises that figure to 100 million, she added. The Beans is also working with 80 distribution partners, including the Boys & Girls Clubs of America, YMCA and two regions of Teach for America.
As such, she expects to use the new funding on technology and product development, as well as new hires.
“We are excited to put the money to work to grow the team and the technology to extend the reach of the product to new markets,” Pancoast said. “When people are stressed out about their money, they do things to make themselves feel better. We are in the position to be in their headspace and then be like the Nike training club to train them on how to get there.”
What investors have to say
Meanwhile, other startups focused on financial planning have also recently received attention from investors, including:
- GoalBasedInvestors, which aims to provide access to anyone who wants goal-based financial planning and advice, raised $2.75 million in seed funding, led by True Ventures, in April.
- SeedFi announced a $15 million Series A raise led by Andreessen Horowitz for its platform aimed at building credit, savings and financial planning.
- Baubap, a mobile lending platform, based in Mexico, in March closed on a $3 million growth round from Mexican financial services firm Grupo Alfin for its proprietary technology aimed at boosting financial inclusion and education.
- Monashees and ONEVC led a $5 million seed round in Brazilian fintech startup Facio, which is developing a financial education platform that not only offers free lectures and courses, but also salary-advance services.
Charles Hudson, managing director at Precursor VC, said in an interview that The Beans provides unique insights into someone’s current behavior.
“Melissa has a ton of interesting and smart insights, as well as the ability to know what she could solve with software,” Hudson added. “The Bean is also going after an initial set of customers that other investors thought you couldn’t help because they didn’t have enough money. That is a false assumption, and I am confident that Melissa and her team are building something consumers want.”
Illustration: Dom Guzman
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