Local startup Koho, a platform designed to finally fix banking, announced a round closure of $1 million last week.
Koho’s mission is to offer Canadian’s, specifically millennials, access to low-cost, highly functional banking accounts. Their investor pool is an entirely Canadian mix of angels and funds, and includes Joe Canavan, Ferst Capital, Hedgewood, Highline and Stanley Park Ventures.
Koho works by partnering with a federal financial institution to offer customers a banking card, web app and mobile app. In addition to all the standard banking functions (direct deposit, purchases, bill pay, atm etc.), Koho users won’t pay monthly fees, can see where and how they are spending their money, set automatic savings goals, receive push notifications, share expenses with friends, set daily budgets and more.
“We looked at the current banking system and thought it seemed unfair that banks were making all this money, while we’re dealing with an expensive, antiquated experience. Once we started exploring, we found all these other ways we could improve the banking experience. Things took off from there,” CEO Daniel Eberhard told Vancity Buzz in December.
With the latest round of funding, Koho effectively doubled their goal of raising $550,000, allowing them to release the alpha version of their product in early fall of this year.
As to why they were able to raise so much investment, Eberhard says, “The biggest thing is that our vision is relatable. Everybody has had to deal with bad banking experiences and we have a real strategy to fix it. I also think we did a pretty good job of diligently de-risking the pain. We ran a tonne of tests around messaging and acquisition. Finally, Fin-tech is just a great sector to be in right now.”
He also notes Koho’s unique features and user experience as a way to attract customers and investors.
“The design is the first thing people notice. We use a lot of visual tools to significantly improve on the status quo. Goals always gets a strong reaction too. Goals is our automatic savings tools, and when people use it, they’re twice as likely to save the amount they need. It’s also really personal: some people want to save for a house, others for a road trip, or a dog,” Eberhard notes. “Available-to-Spend is also popular. We basically look at upcoming, pending and recurring transaction to give people a second balance, which indicates their current cash flow – no more overdraft. Finally, our Filters always lead to good conversation.”
Koho was named one of the 20 hottest startups in Canada, is advised by Gil Penchina (early investor to LinkedIn, Paypal, Angelist, Wealthfront), and recently won the Nasdaq NY Techday award for fin-tech innovation.