For many of us we are not experts in finance but we make big financial decisions that would generally require expertise evaluate properly. We could ask a friend who is in finance but he or she doesn’t always know your specific situations and is not always willing to crunch every number in the interest of time. SmartAsset does all this, and like a friend, does it for free. The destination for financial advice could save you from the terrible decision that ends up sucking away your savings, or can be used a gauge to determine if its worth taking out that student loan. Regardless how you use it SmartAsset is providing the soundest advice you can get.
AlleyWatch spoke with CEO and cofounder Michael Carvin about the need for SmartAsset as well as the company’s most recent round of funding.
Who were your investors and how much did you raise?
We raised $12 million in Series B funding led by IA Capital group with participation from TTV Capital, Contour Ventures, Javelin Venture Partners, New York Life, Peterson Ventures, Transamerica Ventures and Fitz Gate Ventures.
Tell us about your product or service.
SmartAsset helps people make better financial decisions. We offer the Web’s best and most comprehensive tools and content to empower financial decision-making. Utilizing over 130 different data sources we power the web’s best advice on topics like home buying, retirement planning, personal and student loans, credit card comparisons, taxes and more.
What inspired you to start the company?
When I was in the market to buy a house, it was frustrating reading through online information that was dense, hard to understand and not helpful… and I worked in finance! I could only imagine how people who were unfamiliar with the terms felt while navigating a similar decision.
I went home and created financial models to help me figure out how much house I could afford. This was the birth of what would become SmartAsset’s patent-pending back-end technology known as our Automated Financial Modeling (“AFM”) technology.
How is it different?
We do the math so you do not have to. We work with over 130 data sources and partners (various government websites, US Census Bureau, Zillow, Trulia,) and crunch the all numbers ultimately providing the most comprehensive answer to questions like, how much house can I afford? How much should I be saving up for retirement? And, which credit card is best for me?
What market you are targeting and how big is it?
Many companies offer money management. Though before people can get help managing their money, they need to know what they have the ability to do with it. How much money do I need to set aside each month for retirement? Does it make sense to take that student loan and go back to school? Is it smart to buy this house? These are the types of questions we’re addressing. And, we’re offering them comprehensive, and transparent advice so they can make the best decisions concerning their money.
We estimate advertising dollars in the financial services and real estate market will exceed $21 billion in 2015.
What’s your business model?
We are free to our users and make money through advertising.
Tell us about how your experience with Y-Combinator has shaped the trajectory of the venture?
Y-Combinator is a slingshot for startups. They showed us how to focus on the “difference makers” for our business and put us on a trajectory we could not have managed on our own. It also offers an excellent network of mentors and fellow entrepreneurs that have helped us through the entire process, from raising money to product decisions.
What was the funding process like?
The process was surprisingly easy given the funding environment. Our round was oversubscribed resulting in us raising more than our original target.
What are the biggest challenges that you faced while raising capital?
First you must prove the value of the startup and the necessity of the product or services it is offering. Then you must show traction, how has the public taken to the product? And when those two pieces are in place, revenue takes the main stage. Is the product going to make money? Investments are risks the firms are taking, and before they can do that you must get them to trust you and buy into your vision and mission.
What factors about your business led your investors to write the check?
We’ve experienced tremendous growth over the past year as we’ve gone from reaching 10 million to 40 million people per month. We also launched a solution called Captivate, which extends our tools across publisher websites by automatically embedding our calculators and infographics directly into relevant content. Our partners include CNN, AOL and Investopedia (among many more publishers).
What are the milestones you plan to achieve in the next six months?
We want to reach 100 million people per month.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
If it seems like companies achieve monumental growth in a blink of an eye, chances are it was a process of endless nights, moments when they thought it wouldn’t work out, second guesses, and defeat. Keep at it, and when you reach the inflection point seriously consider everything and go with your gut.
Where do you see the company going now over the near term?
We’ll continue our growth. We’re going to use this funding to expand the capability of our proprietary Automated Financial Modeling (“AFM”) platform and grow Captivate.
What’s your favorite restaurant in the city?