With $ 90 million in deposits and $ 18.25 million in new funding, HMBradley is taking steps as a Los Angeles-based participant in the challenger banking competition.
LA is home to a growing community of financial services startups and HMBradley is quickly taking its place among the leaders with a novel twist in banking.
Unlike most banking startups who woo customers with simple loans and sophisticated online user interfaces, HMBradley offers a better savings account.
The company offers up to 3% interest on its savings accounts, much higher than most banks today, and it is this pitch that has won over consumers and investors alike, said the company's co-founder and CEO. Zach Bruhnke.
With numbers increasing due to limited marketing, Bruhnke said increasing the company's final round of funding was a breeze.
"They knew after the first call that they wanted to do it," said Brunke of negotiations with the venture capital firm Acrew, a venture firm whose previous involvement in fintech companies was to support the challenger-bank phenomenon Chime included . “It was a very different kind of fundraiser for us. Our starting round was a terrible, treacherous 16-month fundraiser, ”said Brunke.
For Acrew's part, the company actually had to call Chime & # 39; s Founder to ensure the company is okay with the venture firm supporting another entrant. After approval was given, Brunke said the deal went smoothly.
The founders of Acrew, Chime, and HMBradley see enough natural light between the two business models that investing in one wouldn't conflict with the other. And there is plenty of room for newcomers to the banking business, said Bruhnke. "It's a very, very big industry overall," he said.
As the company increases its deposits, Bruhnke says there are a number of ways it can use its capital. This includes commercial loans on the back end of HMBradley's deposits and other financial services offerings to grow the base.
Right now it has been wooing consumers with one-click loan applications and the high interest rates it offers its various levels of savings.
"When customers hit that 3% level, they get really excited," said Bruhnke. "If you save money and don't save on HMBradley, you lose money."
The money that HMBradley has raised will be used to further roll out the new loan product and hire employees. Former Capital One technical director Ben Coffman and fintech thought leader Saira Rahman have already been poached.
In October, the company said, deposits doubled from the previous month, and transaction volume has grown to over $ 110 million since it launched in April.
Since the company's launch of the company's cash back credit card in July, HMBradley has been able to offer its customers 3% cash back for the highest savings level. This gives you the opportunity to earn 3.5% of your deposits.
The deposit and credit options that the company offers are possible because of its partnership with California-based Hatch Bank.