One Bank Secures $40M Funding for All-in-One Financial Services

One Secures $40 Million in Series B Funding for All-in-One Banking

One, a fintech startup focused on providing comprehensive banking solutions for the middle class, has announced the successful completion of a $40 million Series B funding round.

Investment Details

Progressive Investment Company, the investment division of a major insurance provider, spearheaded the funding initiative. Additional participation came from Obvious Ventures, Foundation Capital, Core Innovation Capital, and several other investors.

This latest financing brings the total amount of funding raised by One since its establishment in 2019 to $66 million.

Growth and Customer Base

Since the general release of its platform in September 2020, One, headquartered in Northern California, has experienced substantial growth. The company now serves “hundreds of thousands” of customers, as stated by CEO and co-founder Brian Hamilton.

Prior to One, Hamilton was a co-founder of PushPoint, a company later acquired by Capital One.

Addressing Financial Stress

Hamilton emphasized that middle-income households and working families frequently encounter financial difficulties and often lack adequate support from existing financial products.

He noted that the current financial market is competitive, and the successful funding round serves as validation of One’s vision and product differentiation.

Product Enhancements and User Savings

Over the last eleven months, One has focused on improving its core services. New features include overdraft protection, an automated savings program offering a 3.00% APY, cash flow-based credit lines, and a credit-building tool.

The company reports that its users have collectively saved nearly $20 million through its platform since launch, with this figure increasing daily.

Innovative “Pockets” Feature

One is also introducing a novel approach to managing shared financial goals and responsibilities through configurable “Pockets.” These can be easily shared with others and accessed using both virtual and physical cards.

Re-integrating Financial Lives

Hamilton explained that One’s goal is to consolidate and simplify the often-fragmented financial lives of middle-income families, assisting them in managing their finances on a daily, weekly, and monthly basis.

He observed a convergence of various fintech and banking products currently available to consumers.

Challenging Traditional Banking

One was founded on the belief that traditional banking systems are flawed, characterized by fragmented accounts and substantial hidden fees that can leave customers struggling financially despite consistent income.

The company utilizes a “proprietary” technology infrastructure designed to provide a unified platform for saving, spending, sharing, budgeting, and borrowing.

Integrated Approach to Financial Services

Hamilton stated that while many companies attempt to offer a wide range of financial services, One was specifically built with integration in mind. This contrasts with companies that try to add features later.

He highlighted the importance of unifying credit, debit, and savings, as well as simplifying money sharing, to avoid reliance on separate platforms like Venmo, PayPal, or Zelle.

Banking Services Provider

One’s banking services are provided through Coastal Community Bank, a Member FDIC. The company clarifies its position as a financial technology firm, rather than a traditional bank.

Future Plans

The newly acquired funding will be allocated to accelerating customer acquisition, expanding the team, and further developing its product offerings.

Investor Perspective

Charles Moldow, a general partner at Foundation Capital and an investor in One, noted that many challenger banks, such as Chime and Aspiration, primarily target subprime customers with debit card offerings.

These banks often appeal to customers underserved by traditional institutions, offering lower fees and faster access to funds.

Focus on the Mid-Prime Market

Moldow explained that banks typically generate the most revenue from mid-prime customers through both debit and lending services.

He pointed out that banks are often hesitant to lose these customers due to their high lifetime value.

One’s Competitive Advantage

Moldow believes One differentiates itself by providing a superior mobile banking experience for the majority of the market – those who are neither super prime nor subprime.

He emphasized that One offers both debit and credit options, coupled with a significantly improved user experience.

Modern Infrastructure

The fintech’s ability to deliver a unique user experience stems from its “modern” core infrastructure, which allows it to handle checking, lending, money transfers, and savings all within a single system.

This enables full integration of features like the “Pockets” functionality.

Efficiency and Cost Savings

Unlike traditional banks with disparate systems, One’s integrated infrastructure allows for a more streamlined and efficient operation.

Furthermore, the absence of physical branches enables the company to offer lower fees, increased rewards, and higher savings rates, as added by Moldow.