Fin-Tech Draws Startup
Tech Coast Angels thinks it’s spotted another fin-tech success story and backed up its enthusiasm by leading a $1.8 million seed financing round for MovoCash Inc., according to Grant Van Cleve, president of the OC chapter and now a board member at MovoCash. The Oakland-based startup has developed a soon-to-be-launched app that will enable friends and family members to make payments to each other. It’s a direct play to “underserved” millennials who either don’t have bank accounts, don’t trust banks, or are unsatisfied with their banking options, Van Cleve said.
Founder and Chief Executive Eric Solis has a connection to OC—he founded his first two startup companies here: SaveDaily in 1999 and Save252 in 2005. Both of the prior startups, like MovoCash, targeted the “underbanked.” It was during that time that he began building relationships with “stalwart TCA members like Luis Villalobos, Don Kasle, Dave Berkus and others,” he said.
Solis said he decided to locate MovoCash in the San Francisco Bay Area because co-founder Daniel Kjellen lived there and because he recognized the need to be near the fin-tech epicenter to draw on the knowledge base and labor pool there.
Solis was in OC visiting his family recently, and Van Cleve heard about the progress he had made and asked if TCA could take a shot at funding its next round, he said. TCA received more than a 110X return when Monrovia-based Green Dot Corp. went public in 2010.
Green Dot, a provider of reloadable prepaid debit cards, raised $164 million through its IPO. TCA members sensed that Movo could be the next Green Dot, Van Cleve said.
“The company was one of the best we’ve seen present and in terms of due diligence,” Van Cleve said. “Truly top notch.”
Movo will offer free peer-to-peer payments, along with a free bank account. App users will be able to send money to friends and family instantly and create digital, prepaid cards on-demand that can be spent in a store, through the app or online wherever credit cards are accepted. Solis expects to launch the app next month, he said.
Movo’s services are offered free of charge to customers, and it earns 1.25% of each transaction through interchange fees that are paid by merchants as a built-in cost for being associated with the Visa network.
Source: Orange County Business Journal
Publish Date: September 19, 2016 (Vol. 39 No. 38)
Author: Deirdre Newman