Most financial services draw in customers with promises of low interest rates or free checking accounts. Los Angeles-based Aspiration flips the formula by offering sustainable consumerism as its biggest draw. Aspiration still offers the basic retail banking and investing services that are considered the norm, but it also allows its customers to donate a portion of their profits to their favorite charity or organization.
A new twist on online banking, Aspiration hopes to offer an alternative to big banking with features such as “plant your change,” in which debit card purchases are rounded up to the nearest dollar so the resulting capital can be used to plant trees. The neobank currently has 1.5 million customers, who can put their money to work investing in fossil fuel-free vehicles that support national parks and myriad nonprofits.
Co-founder and CEO Andrei Cherny sees an “enormous demand” for “sustainability-focused financial products” from his customers. Despite the impact of COVID-19 on global markets, Aspiration saw record months this March and April. The company also recently raised $135 million from investors such as UBS, Sutter Rock, Social Impact Finance, DNS Capital, and O’Connor Capital Solutions.
Premium tier customers receive debit cards made from recycled ocean plastic, and get a higher cash-back rate than those who utilize the basic plan. Aspiration has also teamed up with socially-conscious brands like shoe manufacturer Toms, and online glasses outlet Warby Parker to give customers extra rewards when shopping within those networks. Celebrities such as Leonardo DiCaprio and Orlando Bloom backed Aspiration early on, supporting the sustainable, socially conscious trend in fintech in its nascent stages.
Designed for a generation of gig-economy workers, customers can choose how much they pay for Aspiration’s services. Cherny cited a “phenomenal growth in customers and revenue” over the past two years. Sustainably-minded neobanks are causing larger financial institutions to re-evaluate their business models, as many customers begin to see the old method of banking as lacking, or even broken. Aspiration even allows its customers to decide for themselves how much “good” they are doing, through their “Impact Measurement Score” feature.