Some of Walter Cruttenden’s biggest ideas begin with very small numbers.
“There is a savings and investment problem in America, with about 40% of the population unable to cover a $400 emergency expense,” said Cruttenden, who first gained fame in local business circles in the 1980s forming and running what’s now Roth Capital Partners LLC, Orange County’s largest investment bank.
More recently, he and his son Jeff Cruttenden founded Acorns Grow Inc., one of the most popular micro investment apps in the world.
It has more than 5 million clients and $1.5 billion of assets under management.
Acorns, formed in 2012 and based in Irvine, was valued at around $860 million as of early this year, following a $105 million Series E funding round featuring investors such as NBCUniversal, which is now its largest shareholder; Bain Capital Ventures, and BlackRock.
Among other services, Acorns rounds up users’ spare change from online transactions to the nearest dollar and invests the money into a variety of funds.
A similar focus on small “micro investing” is part of Blast, Cruttenden’s latest startup fintech that fuses a mobile application and financial services to another up-and-coming industry—gaming, a $108 billion a year and growing sector, according to trade data.
Pay (Yourself) to Play
While banks have gamified certain aspects of their mobile applications, financial services have failed to partner with the gaming industry.
That’s where Newport Beach’s Blast comes in.
After signing up to Blast and connecting a verified, personal checking account to a free Blast savings account, gamers will see a small, predetermined amount of money—typically 1 to 10 cents per minute of online game time when playing Blast-endorsed games—transferred from their non-interest bearing accounts to the Blast account, which is federally insured and generates a 2% annual yield.
Users also can earn a small amount of bonus money from completing specific actions in a handful of popular online games.
“Through the founding of Acorns, we made saving money easier and accessible for everyone, but saw that some people were still scared of the stock market or found it boring to put money away for a rainy day, so we thought of merging gaming and savings,” Cruttenden said.
The company was formed quietly in 2017, and launched an Android-version of its product the following year.
Blast took the wraps off an iPhone and PC-friendly version of its product late last month during TwitchCon North America, a live gaming and streaming event that was held in San Diego.
The initial version of the service released earlier this year has already gained traction on the Google Play store, but Cruttenden strives to reach a “wider, younger audience” with the expansion of the platform to Apple’s mobile devices and to PCs.
Backed by Developers
Blast was born to help younger people develop better monetary behavior by “simultaneously engaging in a frequent activity that they already enjoy,” he said.
Candy Crush, Clash Royale, and Marvel Contest of Champions are among the mobile device games Blast currently is affiliated with. The company recently introduced a slew of PC-supported games, including PlayerUnknown’s Battlegrounds, Fortnite and Overwatch. There are plans to add more.
It has partnered with a few mobile and online game developers including San Francisco’s Zynga and Pocket Gems.
The platform is monetized through its partnerships with these development companies, which pay to have their games listed on the site. The companies gain exposure and users, and in return, users micro save and earn.
Roth Investment
Last year, Blast raised $12 million in seed funding.
The first $5 million came from investors including the Forbes family, Core Innovation Capital, Great Oaks Venture Capital, Snowmass Private Equity, Wilson Sonsini Goodrich & Rosati, and others.
Of note, the family of Byron Roth, chairman and CEO of Roth Capital, also invested.
Roth and Cruttenden had an acrimonious split in the late 1990s after the latter left the investment bank to start an internet venture, which led to a well-publicized lawsuit. They’ve since reconciled.
The next $7 million came from personal growth entrepreneur Tony Robinson, Palo Alto-based fintech fund CreditEase and Orange County-based RX3, a recently formed influencer focused venture capital fund based out of Newport Beach.
Along with Byron Roth, partners and backers of RX3 include Green Bay Packers star quarterback Aaron Rodgers, and Alex Bhathal, a Newport Beach resident and business exec whose family has a stake in the Sacramento Kings.
Blast expects to raise a Series A round next year, according to Cruttenden, who also has another micro-investment startup firm, Ant Transaction Machines, in the works. That firm, based in Newport Beach, offers a service that allows users to take control over the collection and use of their personal data, and pool users together to monetize that data.
By Gamers, For Gamers
Cruttenden brought along a few people with ties to Acorns to his newest venture, including his youngest son Alexander Cruttenden, who is a designer and gaming adviser; and Blast co-founder Mark Dru, who helped kick off Acorns.
The team also has Shlomo Benartzi, a behavioral economist at UCLA, on board as one of its advisers; he’s also a board member of Acorns.
Benartzi believes that by “attaching a positive outcome to something that people already do and love, like gaming, you can change lives.”
“All games teach something,” said Cruttenden, who cited chess as one of his favorite games during a recent interview with the Business Journal.
Moving forward, Blast is actively seeking science, engineering, math, art and coding games to strengthen its learning-based gaming initiative, he said.
