Two intertwined Newport Beach-based companies that have launched new products in the past month are looking to become Orange County’s next fintech standouts.
Each has reason for optimism for their chances at success, considering Walter Cruttenden is involved in both.
Cruttenden, founder and former chief executive of what is now Roth Capital Partners LLC in Newport Beach, as well as co-founder of Irvine-based micro-investing company Acorns Grow Inc., among other finance-related ventures, stepped away from his post as chief executive of upstart gaming fintech Blast Inc. earlier this year.
He invited his business partner Mike Gleason, who is also the co-founder and chief executive of their data-sharing fintech Ant Transaction Machines, to take the top spot at Blast.
Behind the scenes, the business partners realized the two companies had a lot in common, beyond each having offices at 4600 Campus Drive in Newport Beach. That’s the same space where Acorns—now approaching a $1 billion valuation—got its start.
“We saw synergies, and we saw that we could reach different audiences with different products,” Gleason told the Business Journal.
Both firms are using some of the same back-end technology that connects users of their products to an investment account that is linked to their bank account.
While Ant Transaction Machines, ATM.com for short, reaches people looking to make money by selling their data to large tech companies like Google or Amazon, Blast targets the gaming community.
Learn & Earn, a new product created by Blast, is designed for high school students, Gleason said.
Each product offers a different experience, from networking to gaming to learning, with the shared goal of helping users micro-invest through an SEC-registered broker-dealer: Ant Money Advisors LLC.
“At the end of the day, we’ve built an investment account for everything, so it all goes to the same place,” Gleason said.
Blast got started in 2017, after purchasing a couple of patents from Acorns.
Acorns rounds up money spent on purchases, and puts that money into an investment account. The company’s raised some $250 million in funds to date, and the Business Journal named Cruttenden a Business Person of the Year award winner for innovation at the start of 2020, for his work at the closely-watched fintech.
Blast is a tweak on the Acorns micro-investing strategy: users receive money as they level up on games, which goes into a savings account.
Blast raised about $12 million in two financing rounds last year, and launched its Android app last fall.
Still, the platform didn’t receive as much attention as the founders hoped it would.
“Blast was probably ahead of its time—it was the first of its kind,” Gleason said. “We realized saving money wasn’t as appealing to gamers as investing. Gamers tend to like risk.”
Blast plans to update its mobile app in January, so that users can micro-invest through the platform.
Blast launched a new product catered toward high school students in mid-November.
After raising a $4 million round of financing earlier this year, which Cruttenden and Gleason personally invested in, backer Franklin Templeton put the company in touch with nonprofit Junior Achievement.
“Junior Achievement augments high school education with financial literacy, work readiness and entrepreneurship,” Gleason said. “They wanted to do something different [and] cool.”
The introduction led to Learn & Earn, which debuted for Apple and Android devices last month. Learn & Earn teaches students non-traditional skills such as coding and storytelling through bite-sized lessons, flashcards and quizzes. Completing a lesson triggers a monetary reward, which goes into the user’s investment account.
While parents can add funds to their child’s account, brands have also signed on to sponsor and support children whose parents might not have the means to participate, Gleason said.
If Learn & Earn goes down that route, Gleason said it would be interesting to see how students respond.
“They could choose to spend their money at Urban Outfitters, or they could choose to put more money into Netflix or another stock.”
Data-sharing app ATM.com went live on the Apple and Google Play stores in November.
After downloading the app and syncing their bank account, users answer questions about themselves and their preferences, and can take part in what ATM.com calls ‘data-dating.’
With data-dating, users can select brands they want to hear from. Like the dating app Bumble, users make the first move, so they aren’t spammed by endless requests, Gleason said.
Over 600 brands—including Walt Disney and Home Depot—pay users 25 or 50 cents to connect. Users earn more money as they answer questions across a wide range of topics such as finances and music preferences. Users also receive funds for completing specific tasks, such as calling a business and asking for a price quote.
The app’s launch has “blown away expectations,” Gleason said.
Not only are users synching their bank account, which is a difficult first step, “our top users are close to earning $100 in the first ten days, and our goal was to see that happen by the end of the year.”
There’s more to come.
ATM.com has yet to share its user data. Instead, it’s building users profiles inside of a virtual vault. As it amasses users with specific preferences, it can sell data to companies and brands, and give a portion of the funds back to its users, Gleason said.
ATM.com, Learn & Earn and Blast provide its users’ access to an investment account through Ant Money, which handles all of the “fintech plumbing” on the backend, Gleason said.
Users are given some parameters to help them make smart investment choices; about half of their investment funds will go into exchange traded funds. Users have the option to put the other half into select stocks from a pre-curated list of 200 stocks.
All of these products, and subsequent ones, are meant to tackle what Walter Cruttenden would call an under-investing and under-saving problem in America, Gleason said.
“If he could create a way to help people save, he thought it might put them in a better position when a tire blows or when something happens to their job. That’s kind of what’s happening now, and people are having to rely on their saving or investing.”