Cleo has raised $44 million in a Series B financing to expand its digital financial adviser platform targeted at Gen-Z consumers, the company announced Friday (Dec. 11).
The round was led by EQT Ventures and joined by existing investors Balderton Capital, LocalGlobe and SBI. Cleo’s other investors include Taavet Hinrikus, Matt Robinson, Errol Damelin, Niklas Zennstrom, Alex Chesterman and Ian Hogarth.
Cleo bills itself as a digital financial assistant and adviser for Generation Z. Its platform, which has 4 million Gen-Z and millennial users, provides customers with insight into their finances and data to make financial decisions. Cleo’s revenue has increased 400 percent over the past year, according to the London-based company.
“Barney and Cleo are truly disrupting consumer finance,” said EQT Partner Tom Mendoza, referring to Cleo CEO and Founder Barney Hussey-Yeo, in a statement. “They’ve taken a radically different approach to money management and created an AI financial advisor with a personality that proactively delivers personalized insights that help customers spend less and save more.”
“As Cleo is a horizontal platform sitting on top of banks, the company will be able to scale globally faster than most of its competitors,” Mendoza added.
Cleo said it plans to use the latest round of cash to find news ways to help users improve credit and stabilize their finances, expand further into the U.S. market, and make additional management hires in the San Francisco Bay Area.
Cleo is part of a new generation of personal finance services aimed at helping Americans take better control of their finances.
A PYMNTS survey in late March showed that 45.4 percent of consumers had $2,500 or less in savings, while 15.6 percent had no savings at all. Lack of a cash cushion hits consumers making less than $50,000 a year the hardest. The survey showed 69.3 percent of Americans in that income bracket had $2,500 or less in savings, while 28.9 percent had none.
In recent years, apps like Wally, Mint, YouNeedABudget and Acorns have launched in a bid to help consumers build budgets and digitally track them to stay on financial management plans.
How the apps work varies, but in general, they encourage consumers to design a monthly budget for how much they want to spend in various areas (food, entertainment, apparel, etc.), with options to pushing money into savings/investment accounts designed to grow over time. The apps tend to send consumer real-time notifications via text when they are approaching their monthly budget limits so they can start curbing their spending.