New fintech startup PrizePool, which combines online banking with a monthly sweepstake designed to incentivize personal savings, has picked up $4.25 million in seed funding.
The company is taking aims at the low saving rates among Americans, nearly half of whom could not afford a sudden $1,000 expense before the pandemic, according to a survey from Bankrate.
"It's a new way to save money, and hopefully incentivize folks to save money, for those unexpected expenses," CEO and co-founder Frank Chien told Cheddar.
PrizePool will guarantee $50,000 worth of prizes each month, including at least one $25,000 sum given out to a single winner. The rest of the prizes begin at $2 and go up.
"The way you enter is simply by saving money," Chien said.
The entrepreneur stressed that user deposits will be held by Evolve Bank & Trust, a commercial bank with a footprint in Arkansas and Tennessee.
"So your money is FDIC insured and risk-free completely," he said. "We actually run the entire program under sweepstakes law, so we're completely compliant and eligible in all 50 states."
The startup is also promoting how users can further incentivize each other to save through a system that rewards referrals with a 10 percent bonus on the new user's winnings.
"We're making savings a more shared experience," Chien said. "Every friend or family member that refer to PrizePool gives you more chances to win."
The seed funding will help PrizePool develop its software and pay for a marketing push, he said.
Chien was also behind the education-technology startup LearnSprout, which Apple acquired in 2016. The tech giant at the time was developing educational tools on its iPad product to compete with Chromebook in serving classrooms.
LearnSprout appears to have since been absorbed into the larger company.
Debt ceiling talks are underway in Washington, DC ahead of a default deadline. Michael Rosen, chief investment officer with Angeles Investments, joined Cheddar News to explain how a potential default could affect investment portfolios, among other items, for Americans.
Australia's government announced regulations for buy now, pay later services, which will be labeled as consumer credit products, which puts them under the country's Securities and Investments Commission's watch.
Walmart is reportedly teaming up with pet telehealth provider Pawp, giving subscribers unlimited access to vet services via video and text, starting on Tuesday.
Cheddar News checks in to see what's on The Day Ahead, which will include earnings from Lowe's, Dick's Sporting Goods, BJ's and AutoZone along with new home sales data. In addition, Microsoft's Build 2023 Developer Conference is slated to kick off for software engineers and web developers.
Amazon will use a new feature in its palm-scanning system to verify one's age to purchase alcohol.
Venmo will soon have accounts for teenagers ages 13-17 but they will have to follow a set of rules, with parents or guardians opening accounts on their behalf under their own accounts.
Rory Harvey, General Motors' incoming North American president, joined Cheddar News to discuss GM's foray into the rapidly-changing electric vehicle market along with what lies ahead. "It's a very dynamic time in the automotive industry," he said. "If you look to the transformation across the EVs, it's happening and it's happening at a pace."
Tesla trimmed prices by offering discounts of around $1,300 for its Model 3 vehicles, continuing price adjustments across its fleet since January.
A new oral weight-loss drug from Pfizer could be more effective than the popular Ozempic injection, based on clinical trial results.
Ford Motor laid out some financial expectations and specific growth objectives for its electric vehicle line at an investors' event on Monday. John Lawler, chief financial officer of Ford Motor Co., joined Cheddar News to explain what lies ahead for the automaker.
