For those who know financial planner Suze Orman‘s work, it’s no surprise that her debut in startup life begins with the word safe. The personal finance thought leader has more than 30 million copies of her book in print, conducts seminars around the world, but as she recently told TechCrunch, “The only thing that really changed people’s lives, in my opinion, was the ‘Suze Orman Show.’” The 12-season show aired on NBC, where Orman shared wisdom about personal finance and the importance of an emerging savings account.
“People would sit there and they would be entertained and they would understand,” Orman said. “People just want to be told what to do. They don’t even care why they do it, I’m sorry to say.”
The idea of doing, not just saying, prompted Orman to join the founding team of SecureSave, a fintech company built by returning founders Devin Miller and Bassam Saliba, who spawned the company from Pioneer Square Labs in Seattle. SecureSave is building an easier way for employers to offer employee sponsored emergency savings accounts.
Today, SecureSave partners with companies to offer ESAs that can be automatically deducted from an employee’s payroll and deposited into an account; employers can also match contributions or award bonuses if employees meet savings goals. Unlike savings accounts, ESAs allow employees to access their accounts instantly at any time.
Following its launch during the pandemic, SecureSave announced today that it has raised $11 million in a round led by Truist Ventures, the venture capital division of Truist Bank, with participation from Stearns Financial Services Inc. and crypto platform FTX.
The new funding round follows a seed round in January 2021, although the co-founders do not consider the tranche a seed add-on or a Series A round. When asked, Miller said the latest round’s investors had approached the company to “invest in an additional seed round on favorable terms for the company. So we’ve drafted new terms for these strategies, which also included all of our major investors. ”
It’s unclear whether the terms, or valuation at which SecureSave raised, were consistent with seed capital or valued the company above or below its first round of funding — closed at a very different time in technology.
Notable semantics aside, it’s coincidental timing for the startup’s fundraising as the market seems to be headed for a downturn. (In a similar vein, Miller emphasized that “there’s no link between what we’re doing and crypto; you’re not going to save your emergency savings in crypto,” despite FTX’s involvement in the round.)
It echoes Orman’s philosophy, which revolves around the importance of taking simple steps toward a healthier financial life.
Orman’s involvement was hidden from the public at first, a choice the co-founders made to protect the startup from massive attention until the product had more legs. The co-founders said they needed to prove Orman’s involvement was legitimate for investors to pitch. After all, she could have financed the startup herself.
“On ourselves, [Bassam] and I’m a very fundable duo,” Miller said. “To bring in Suzy, we had to convince them that she was actually very deeply involved with the company.” Orman said she’s backtracked on a number of suggestions for a product roadmap from her other two co-founders, including making it less like Mint, a personal finance platform adorned with charts and data, and more like a wallet that can inspire people to to save.
Orman’s early feedback influenced the design of the app, Saliba says, so it was just focused on telling people how much money is coming in and helping them get it if they have an emergency.
“Don’t get in the way of that, but don’t make it too simple,” he said. “We always use this analogy of, it’s a piggy bank and it’s your money, so if you have an emergency you can get to that money, but also if you have the hammer you’re about to break it.. … we want to slow down to make sure you really want to do that.”
The company declined to name specific customers or offer a total number of customers, but did say that eventually its dream would be to serve larger companies like Walmart and Chipotle, not just tech companies with people who might already have the language. neobanks speaking and savings.
For employers to offer SecureSave, the price is typically $3 per employee per month. Most employers give about $125 a year in incentives, the startup says.
So far, the company says it’s seeing an adoption rate of nearly 60%, with employees saving more than $100 a month on average, and more than half of users checking their bills every month. More than 90% of employees are still participating in the program six months after they join, indicating a kind of stickiness that fintechs love.
One thing fintechs love, but SecureSave doesn’t, is the move to horizontal. The co-founders said they are not going to use ESAs as a wedge to get into every other corner of an employee’s financial life; instead focusing on the vertical in general rather than a range of different products.
“Everybody’s trying to land and expand, they’re trying to rationalize this ridiculous customer cost of acquisition pricing,” Miller said. “But as a fintech trying to spend money to acquire and expand… we had some investors a year and a half ago who said [we] I just don’t want to fund those companies anymore… and I think that’s just a dead proposal right now.”
He added: “Our guess is that emergency savings as a brand concept and as an industry vertical are big enough.”