MoneyLion is a private fintech business that provides customers loans, financial advice, and investment options. It was founded in 2013, and its goal is to reach 70 percent of American consumers, a segment with less than $2,000 saved per year on average. The company's goal is to improve the efficiency of consumers' savings and money management while increasing their credit. Most MoneyLion Plus Members are first-time investors, per a report released in March of 2018.
The company earns its money through its lending company, leads generated by customers on its website, and its monthly subscription services. Users of MoneyLion's service start as visitors and can choose to use the platform for free or to purchase its premium services to consumers via an upgrade to membership or loans.
MoneyLion's Founding
The company was founded in New York City by tech experts and financiers. They developed the company's machine-learning and analytics technology to provide individualized guidance to people according to their spending habits. MoneyLion provides customers with access to small-sized loans to aid them in managing the fluctuating expenses and income of their monthly. Customers are rewarded with points as the reward program when they open a bank account or maintain their credit utilization at a low level. MoneyLion's program is akin to point-earning credit card schemes.
Founders and Backers
MoneyLion is led by the co-founders and chief executive Diwakar Choubey. He was previously employed on Wall Street as a senior executive at various firms such as Goldman Sachs, Citadel, and Barclays Capital.The business has four offices around the world. The company has received five funding rounds for $269.5 million. The final Series C round brought in $160 million in July 2019 and a valuation of close to $1 billion. Other investors comprise Fintech Collective, Grupo Sura as well as Sanhua Capital. The funds have been instrumental in helping MoneyLion be competitive with large and smaller fintech rivals. The company's earnings and estimated market value are not disclosed.
MoneyLion's Critics
The platform is rated with a 4.6-star review on TrustPilot, a well-known consumer-oriented review site. The reviews criticize the company's customer service, slow-than-promised funds transfer times, and other issues with account accounts. However, the growth of the platform has been swift despite these criticisms.
Loans Becoming a Key Driver
MoneyLion earns money through its loan service, which has accumulated more than 4 million customers since its launch in 2013. The company has received numerous accolades, such as The Best Personal Loan App, as per PYMNTS.com.
Fast Loans
In addition to offering tools to monitor savings and spending and track credit and credit, the company also offers low-cost investment and borrowing services through its MoneyLion Plus membership. The service allows loans of up to $500 with a 5.99 percent annual percentage rate or less without credit checks payable within 12 months. The company can be capable of providing low rates by making use of brokers' accounts to secure the loan. The loans can be repaid after 15 seconds from the application, as per MoneyLion.
MoneyLion Plus Subscription Service
It was launched in December of 2017. MoneyLion will automatically take $79 out of a customer's account per month, putting $50 into their accounts for investment and charging the amount of $29 for a monthly charge. Customers earn $1 cashback per every login day, meaning those who can log in each day and go through a couple of screens have the service free of charge. The managed investment account transfers the money saved into an investment range of ETFs and doesn't charge fees for management.
Lead Generation Service
The company also earns revenue through its lead-generation business, which suggests additional financial services to people who might profit from these services. Partners include businesses that are related to it, such as credit monitoring companies. MoneyLion additionally has sponsorship agreements with various organizations, including NASCAR. Its association with NASCAR offered cash back to customers who bought NASCAR tickets and other purchases at its racetracks.
Competitors
MoneyLion faces off against a growing array of fintech companies that cater to customers, such as LearnVest, Betterment, and Intuit digital finance firms. In the meantime, as tech startups disrupt the traditional banking sector, older players go to the defense. For instance, in August, JPMorgan Chase launched a fee-free application called "You Invest," targeting Millennial clients who trade via smartphones. According to The New York Business Journal, others in the industry have followed a similar path, and companies.
