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SaveUp Tips Personal Finance On Its Head
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With $1 trillion in student loans outstanding and a less-than-robust
job market to help graduates finance their repayment, new ideas on how
to help young people cope with their finances would be welcome. And
based on the market’s response to SaveUp, its CEO Priya Haji is showing that she has a new idea that’s working.
As she explained in a November 25 interview, “SaveUp operates differently than most financial tracking tools by rewarding its users with tangible prizes (such as cars, vacations and cash) when they make positive financial decisions. We based SaveUp on the on Prize-Linked Savings in which consumer get prizes in lieu of interest — which can be done by financial institutions in many countries. In most U.S. states, however, laws make it difficult for banks to provide these kinds of accounts. Due to our use of this concept, engagement rates with millennials and women are much higher than traditional financial services.”
Haji brings a unique set of experiences to SaveUp. “I grew up in Bryan, Texas which is two hours from Houston and two hours from Austin. My dad is from east Africa and my mom is from India. My entrepreneurial journey began in high school when I set up a free health clinic in Bryan. I love the feeling of creating something new with no resources that benefits society,” said Haji.
Her next stop was Stanford. As she explained, “I majored in Religious Studies and PreMed at Stanford and started Free at Last a non-profit for helping people with substance abuse problems that had a for-profit arm. I decided that while being a doctor was great and would let me help one person at a time, being an entrepreneur would let me help thousands or millions of people. At Berkeley — where I got my MBA — I helped create World of Good — a venture-backed company dedicated to building ethical shopping experiences with mainstream retail partners — that eBay acquired in 2010.”
In 2011, she co-founded SaveUp. As she said, “Due to the recession, people were struggling. I thought that there has to be a new and innovative way to help people with their finances. I wanted to encourage new habits to help them reduce their debt and save. I thought we could use behavioral economics and gamification to appeal to younger people. The financial services industry took such a static approach.”
The results have been compelling. “We used a game register to encourage people to contribute to their 401ks and pay down their student loans and car loans. If they take the right action they earn sweep credits that qualify them to win up to $2 million. Since we introduced the service in November 2011, our users have saved or reduced debt by over $1 billion,” said Haji.
Every day SaveUp releases a new version of its product and its value proposition has proved compelling. “We are an iterative development shop. We introduced the value proposition and 50% of the people who saw the site signed up. 20% of the people who use SaveUp use it every day and 45% use it every week. Traditional financial services clients engage every quarter or every year,” Haji explained.
SaveUp has a business model and capital. As she said, ”We make money from advertising and sponsors including Virgin America and Charles Schwab. We recently partnered with PayPal that pays us a partnership fee. We raised $6 million from True Ventures and BlueRun Ventures.”
SaveUp is located in a “low-brow building” in San Francisco’s SOMA district. According to Haji, “We have 13 people in a building with floor tile that looks like a public bathroom. We are there because of the synergies you get from being located near other startups — in the local coffee shop you see other entrepreneurs and capital providers and our people like the lifestyle there.”
Haji has a clear vision for SaveUp’s future. As she said, “I would like it to be a widely adopted utility for Gen Y to pay down student loans, buy houses and cars, and meet their retirement goals. It will help them track, organize, and learn about financial things.”
And it would not shock me if SaveUp’s investors profited some day by getting acquired by eBay or Intuit.
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As she explained in a November 25 interview, “SaveUp operates differently than most financial tracking tools by rewarding its users with tangible prizes (such as cars, vacations and cash) when they make positive financial decisions. We based SaveUp on the on Prize-Linked Savings in which consumer get prizes in lieu of interest — which can be done by financial institutions in many countries. In most U.S. states, however, laws make it difficult for banks to provide these kinds of accounts. Due to our use of this concept, engagement rates with millennials and women are much higher than traditional financial services.”
Haji brings a unique set of experiences to SaveUp. “I grew up in Bryan, Texas which is two hours from Houston and two hours from Austin. My dad is from east Africa and my mom is from India. My entrepreneurial journey began in high school when I set up a free health clinic in Bryan. I love the feeling of creating something new with no resources that benefits society,” said Haji.
Her next stop was Stanford. As she explained, “I majored in Religious Studies and PreMed at Stanford and started Free at Last a non-profit for helping people with substance abuse problems that had a for-profit arm. I decided that while being a doctor was great and would let me help one person at a time, being an entrepreneur would let me help thousands or millions of people. At Berkeley — where I got my MBA — I helped create World of Good — a venture-backed company dedicated to building ethical shopping experiences with mainstream retail partners — that eBay acquired in 2010.”
In 2011, she co-founded SaveUp. As she said, “Due to the recession, people were struggling. I thought that there has to be a new and innovative way to help people with their finances. I wanted to encourage new habits to help them reduce their debt and save. I thought we could use behavioral economics and gamification to appeal to younger people. The financial services industry took such a static approach.”
The results have been compelling. “We used a game register to encourage people to contribute to their 401ks and pay down their student loans and car loans. If they take the right action they earn sweep credits that qualify them to win up to $2 million. Since we introduced the service in November 2011, our users have saved or reduced debt by over $1 billion,” said Haji.
Every day SaveUp releases a new version of its product and its value proposition has proved compelling. “We are an iterative development shop. We introduced the value proposition and 50% of the people who saw the site signed up. 20% of the people who use SaveUp use it every day and 45% use it every week. Traditional financial services clients engage every quarter or every year,” Haji explained.
SaveUp has a business model and capital. As she said, ”We make money from advertising and sponsors including Virgin America and Charles Schwab. We recently partnered with PayPal that pays us a partnership fee. We raised $6 million from True Ventures and BlueRun Ventures.”
SaveUp is located in a “low-brow building” in San Francisco’s SOMA district. According to Haji, “We have 13 people in a building with floor tile that looks like a public bathroom. We are there because of the synergies you get from being located near other startups — in the local coffee shop you see other entrepreneurs and capital providers and our people like the lifestyle there.”
Haji has a clear vision for SaveUp’s future. As she said, “I would like it to be a widely adopted utility for Gen Y to pay down student loans, buy houses and cars, and meet their retirement goals. It will help them track, organize, and learn about financial things.”
And it would not shock me if SaveUp’s investors profited some day by getting acquired by eBay or Intuit.
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