Saving money for a rainy day (or year) ☔

In honor of Women’s History Month, we launched an exclusive report entitled Funding Diversity. By sharing actual figures of funding to female-led companies, we hope to help shine a light on improvements that need to be made to boost funding to female-led companies.

While the latest relief bill is still in discussion, we are seeing that many of the stimulus checks aimed at promoting spending during the pandemic are not in fact used for spending but rather saved for future rainy days, especially by households with higher disposable incomes. This trend is in part driven by startups that are offering smarter ways to save money. According to AP, the overall personal savings rate jumped to 20.5% in January, up from 13.4% in December.

🏦  Neobank Startups
Startups like Chime Bank, Aspiration, and Revolut are neobanks that operate exclusively online, without physical branches. They have thrived during the pandemic as traditional banks with physical branches were closed due to social distancing and lockdowns, and users got used to the lack of physical branches. Because all transactions are made online, these niche banking platforms can offer convenience, lower commissions, higher savings rates, and lower barriers to account opening. 

💵  No-frill investing 
Aside from stock trading apps like Robinhood, hugely popular via “meme stocks,” companies like Motley Fool, Stash, and others are lowering the barriers to investing with education content on investing as well as low-cost plans to support stock trading and retirement IRAs. 

🤖  AI for loans & debt
The pandemic has left many households in high debt, causing them to fall behind on credit card payments, student loan debt, and more. Companies like Symend are attracting attention from VCs for their use of AI to help customers resolve past-due bills. Similarly, Utah-based Lendio operates a marketplace that leverages AI to help small businesses find the right small business loans.