“Broke? Ballin’? Getting By?” Not the usual questions you would expect to hear from your financial advisor or fintech brand. But Stackin is not like any other fintech app. For a start, there is no app; the communication is entirely text-based. Scott Grimes, Stackin’s founder, believes the average American wants this level of simplicity, and so far it looks like he’s right.

Most people still feel it is near impossible to have a straightforward conversation about their finances. Products and services often come in a different language and the consumer needs prior knowledge to understand which products are available and suitable for them. Stackin however, is a personal finance service that helps anyone save and invest from the ground up.

The “Stackin 99%”

Scott and his CTO Tom Brammar are targeting the “Stackin 99%”. This is the large group of people who have income but are not seen as potential high value customers by the financial services industry. Stackin uses an SMS based recommendation engine that combines financial education with personalised product advice to reach out to people who would usually not choose to engage with the financial services available to them. Its tone is not just straight-forward, it’s downright earthy: Stackin wants to be a “BFF for your money”. While this might sound like yet another fintech targeting millennials and Gen Z’ers, Stackin’s subscriber data show that its tone resonates with a very broad demographic of US society, that spans age groups, backgrounds and regions. The brand is talking to anyone with limited knowledge of financial products and uses simple terminology paired with an easy sign-up to convert this segment into financial customers. Stackin informs and then recommends relevant products to its subscribers “one text at a time”. They do not feel judged, they feel included and empowered as they become aware of the amplitude of financial products available today.

Meeting of minds

We first met Scott when he was raising Stackin’s Series A round. It was early in the journey but Scott was already looking to build an international business, so expanding his investor base beyond the US was a logical first step. Now at Series B, Stackin’s ambitions for a UK launch are clearer. Tom Brammar is based in London but spends a lot of time at Stackin’s HQ in LA. (Tom’s stash of English Breakfast tea eased our deal team’s jet lag through the site visit). For Octopus, this represents a chance to flip our usual role of helping European startups expand to the US, this time using our network to support this US team gain traction in Europe.

Lockdown

As the world went into lockdown we were in the midst of due diligence. However our view on the business remained undeterred. As yet Covid-19 has neither adversely affected subscriber traction nor new customer acquisition. There is also the strong likelihood that Stackin could play a crucial role in helping its subscribers through the hard times ahead. Stackin has adapted its product road map, prioritising a credit rate boosting feature and non-predatory credit products pre-vetted for their customers. .

Why we invested

Both Scott and Tom are serial entrepreneurs. Tom’s background is finance and tech but Scott’s is in media. This explains Stackin’s emphasis on the customer relationship, contrasting with other product-led fintech businesses like Nerdwallet or Credit Karma. While others are going after millennials or the gig-economy, Stackin is becoming the guide on all things financial for a previously unengaged market of modestly solvent people who don’t want to hear terms like “annuity” or navigate yet another app. Scott’s media know how combined with Tom’s strong fintech execution capabilities, make for a unique customer proposition serving an often-overlooked part of the market, contributing to the ongoing trend of democratisation of access to financial services.

100%

Stackin has a very capital-efficient business model; Scott has built an impressive business with a team of 15 and relatively little prior investment. The company’s markedly low customer acquisition cost makes it a valued partner for fintech disruptors and incumbents alike. Being a trusted, long-term partner to its subscribers is at the centre of Stackin’s strategy, meaning that the team is 100% focused on vetting products on their positive impact over short-term sales goals.

Scott and Tom bring together that positive West Coast energy that recruits, motivates, and maintains a very talented team, with big picture vision that is grounded in the detail. It is an exciting dynamic we are looking forward to being alongside, one text at a time.