HMBradley Inc., a Santa Monica-based fintech company focused on banking services, has raised $18.3 million in Series A funding.

The round was led by Acrew Capital, with participation from Mar Vista-based Walkabout Ventures, Santa Monica-based Mucker Capital, Pelion Venture Partners, Accomplice, Slow Ventures, Concrete Rose Capital and Commerce Ventures.

HMBradley operates a banking platform that offers a high-yield deposit account and a credit card. The company differentiates itself primarily through a focus on incentivizing savings, which founder and Chief Executive Zach Bruhnke said better aligns businesses interests with customer interests.

“Banks are always trying to grow deposits,” Bruhnke said. “The way they have historically done that is by just offering a flat (interest) rate. … We didn’t really think that made sense. In insurance, you don’t price a 20-year-old runner the same as an 80-year-old smoker.”

Bruhnke’s bank offers up to a 3% annual interest rate on account holders who receive at least one direct deposit in their accounts per month and save at least 20% of that money. That compares to an average annual interest rate of 0.05% at banks nationwide, according to the Federal Deposit Insurance Corp.

Founded in 2018, HMBradley finalized and launched its banking platform in late March of this year — just as Covid-19 lockdowns shuttered most of the U.S. economy. Bruhnke said launching in the face of a global pandemic was daunting, prompting his team to consider delaying the platform’s debut. “We were thinking, ‘Maybe we can just wait this out?’” he said. “Fortunately, we didn’t do that.”

Despite some initial difficulties, Bruhnke said HMBradley’s savings-focused pitch began to gain traction with consumers looking to shore up their finances in the face of economic uncertainty.

“A lot of it is people are starting to think, ‘What if something else happens?’” he said.
Bruhnke said HMBradley has received more than $90 million in deposits since its launch with an average account balance of just under $30,000.

In July, the company also began offering a credit card that provides cash back of 3% on a customer’s top spending category each month. This is followed by 2% cash back for thesecond-place spending category and 1% for the third-largest category.

“Last month, I ended up spending about $800 on auto work,” Bruhnke said, citing his own use of the product. “I got about 3% cash back on that.”