hmbradley Secures $18.25M to Disrupt LA Banking

Backed by $90 million in customer deposits and a recent $18.25 million in funding, HMBradley is rapidly establishing itself as a significant competitor in the challenger bank sector, based in Los Angeles.

Los Angeles is experiencing growth in the number of financial technology startups, and HMBradley is quickly becoming a prominent player with a distinctive approach to banking.

In contrast to many new banking ventures that attract customers through accessible credit options and user-friendly digital platforms, HMBradley is focused on providing a superior savings experience.

The company provides savings accounts with interest rates reaching up to 3%, considerably higher than the rates offered by most traditional banks, and this offering has resonated with both customers and investors, according to co-founder and Chief Executive Officer, Zach Bruhnke.

Bruhnke noted that securing the latest round of financing was straightforward, driven by the company’s positive momentum and limited marketing spend. 

“Investors were eager to participate after the initial discussion,” Bruhnke explained, referring to negotiations with Acrew, a venture capital firm with prior investments in fintech companies, including the challenger bank Chime. “This fundraising process was markedly different from our seed round, which took a challenging 16 months to complete,” Bruhnke stated.

Acrew proactively contacted Chime’s founder to confirm their comfort level with the firm investing in another banking competitor. Once this approval was obtained, Bruhnke said the deal progressed without issue.

The founders of Acrew, Chime, and HMBradley believe there are sufficient differences in their business models to avoid any conflicts of interest. Bruhnke also emphasized the substantial size of the overall banking industry, indicating ample opportunity for new participants. “It’s an extremely large industry overall,” he added.

As the company’s deposit base expands, Bruhnke indicated that the capital will be utilized in several ways, including providing commercial loans supported by HMBradley’s deposits and introducing additional financial services to broaden its customer base.

Currently, the company is attracting customers with simplified, one-click credit applications and the attractive interest rates available across its various savings tiers.

“Customers are particularly enthusiastic when they reach the 3% interest tier,” Bruhnke said. “If you are currently saving money and not using HMBradley, you are potentially missing out on earnings.”

The newly raised funds will be allocated to the continued development of its credit product and the expansion of its team. The company has already recruited Ben Coffman, formerly the Director of Engineering at Capital One, and Saira Rahman, a recognized leader in the fintech space. 

The company reported that deposits doubled from one month to the next in October, and transaction volume has surpassed $110 million since its launch in April. 

Since the introduction of its cash back credit card in July, HMBradley has been able to offer its top-tier savers 3% cash back, in addition to the option to earn 3.5% on their deposits.

The company’s deposit and lending services are enabled through its partnership with Hatch Bank, a California-based institution.