One, a new neobank targeting the middle class, announced this morning it has raised $17 million in a Series A financing from Foundation Capital, Core Innovation Capital and Obvious Ventures.
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The round brings One’s total raised since its January 2019 inception to $26 million. The startup, which is based in San Francisco and Sacramento, previously raised $9 million from its chairman and co-founder Bill Harris.
We’ve been covering the rise of neobanks globally. Just last week, for example, I wrote about NorthOne, a New York-based digital bank aimed at small and medium businesses (SMBs), raising a $21 million Series A.
This news caught my attention for a couple of reasons. For one, One’s co-founders are serial entrepreneurs with deep industry experience. Former Intuit CEO and PayPal founding CEO Harris serves as One’s chairman. Brian Hamilton, who co-founded PushPoint (which was acquired by Capital One), is CEO of One.
I’m also intrigued by the company’s emphasis on the middle class. To be clear, there are other digital banks focused on this demographic (MoneyLion, which neared unicorn status last year with a $100 million Series C, being a prime example). But there’s no doubt that as the country faces a potential recession fueled by the coronavirus pandemic, the middle class will be among the hardest hit.
The company told me: “We are focused on middle-income families across the US. This includes traditional families, but also single partners, people who support parents, kids and other family members; roommates and more.”
I also find it interesting that Obvious Ventures, an impact investor, put money in the round. One, which today said it is opening up early access to its private beta, also claims to be the first digital banking service to integrate credit with the goal of “making it seamless to save, spend and borrow money.” The thought behind that is that in the current financial system, people’s money is broken up into siloes, according to Hamilton.
“Most people have a balance in their checking account that earns nothing and outstanding debt on their credit card that costs too much,” he said in a written statement. “One is designed to maximize a family’s hard-earned paycheck by unifying saving, spending and borrowing into one account. When this money is being managed from one place, people save more, are charged less and gain control.”
To Harris, One addresses a gap in the banking industry.
“Traditional banks cater mostly to affluent customers and new digital banks target younger individuals with simpler financial needs,” Harris said in a written statement. “Middle-class American families are being left out.”
One is planning for a public launch this summer, and its new capital will help it scale toward that goal. The company currently has 40 employees.
Illustration: Li-Anne Dias
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