A majority of Americans are at financial risk and the need for the security of savings is even more evident during this year. PrizePool reimagines savings and creates a new way to incentivize Americans to build a better financial foundation. Launched today, the company announced a seed round of $4.25 million led by Accomplice, Bling Capital, Coatue, SciFi VC, and World Innovation Lab, among others
More than half of Americans do not have the savings to cover an emergency expense of $1000, living paycheck to paycheck with no reserve for ‘what if.’ However, a majority of Americans spend cash on the lottery every week in the hope of a big win. The actual odds of winning with the lottery and scratch cards are very low. Still, people in the United States spent more than $91 billion on lottery tickets in 2019, according to the North American Association of State and Provincial Lotteries.
“Now more than ever, Americans need to be saving money to protect their future,” said Frank Chien, co-founder and CEO of PrizePool. “But we know that saving can be hard to prioritize, and our goal is to reduce the barrier to saving money by making it fun in two unique ways. First, we guarantee a total of $50,000 in real cash prizes every month, and second, our referral program makes saving a social activity — so that you can save and win together.” Chien and his co-founder, Joe Woo, sold their first company, LearnSprout, to Apple in 2015.
Guaranteed Monthly Prizes that total $50,000
PrizePool ups the game of today’s boring, low-growth, savings accounts. It gives customers a new, fun place to save — one where their money is their chance to win real cash prizes guaranteed to total $50,000 every month. PrizePool pays out a $25,000 Grand Prize each month, along with thousands of smaller prizes. A new model of prize-linked savings, PrizePool feeds the desire that people have ‘to play and win’ but does so as they save, at no cost or risk to customers. All deposits are FDIC insured, by Evolve Bank & Trust, and there are no fees and no minimums to participate.
PrizePool’s unique referral program is designed to transform saving money from a solitary act to a shared, social, and even more rewarding experience. The program lets people save together with friends and family. When a PrizePool user refers a friend, there are shared benefits: they inspire each other to save more, and they increase their chances of winning together.
How it works – once users sign up for PrizePool, they can refer friends and family to join and save. When a user refers a friend, they both win a 10% bonus when the friend wins a prize – the friend receives an extra 10% boost for using the first customer’s referral code and the original user gets a bonus of 10% of their friend’s winnings too. These bonus prizes are incentives to save and play together.
“When I met Frank and Joe, the founders, and saw their track record in tech and education, I knew they were serious about looking to build a business with the goal of getting people to focus on their financial lives in a unique and engaging way,” said Andy Chen, Partner, Coatue. “We believe this experience combined with the commitments to both guarantee monthly prizes and create a social, referral model sets PrizePool apart from others in the market.”
“We have been big fans of prize-linked savings for a long time, and believe it has the potential to reshape savings habits in America. We’re glad to have found an excellent team to execute on this,” said Nellie and Max Levchin, Partners at SciFi VC. Max also is CEO of Affirm, Co-founder of PayPal.
The funding will enable PrizePool to invest in product development, drive user acquisition, boost marketing initiatives, and build its team with new hires. PrizePool is available nationwide.