Is Your Money at the Mint?

Posted by Eli Magid in Payments & Consumer Finance on Aug 28th, 2009 | Comments

Line Break

Author: Eli Magid (10 Articles)

Eli is a financial markets entrepreneur and co-founder of a green start-up which utilizes carbon finance to prevent rainforest destruction in developing countries. Previously, Eli worked for Morgan Stanley facilitating M&A, equity offerings and private placements among a variety of industries. Eli began his career at Credit Suisse, structuring and executing over $15 billion of debt securitizations across a diverse credit and product spectrum. Eli has a BSc in Applied Economics & Management from Cornell University.

If you're new here, you may want to subscribe to our RSS feed. Thanks for visiting!

While FinTechIsrael! readers were enjoying a good part of their August in Turkey, Greece and the Hamptons, personal financial management start-up Mint.com was also having a busy summer…minting money.

Founded in 2006, launched in September 2007 and based in Mountain View, California, Mint closed a $14 million in a Series C funding round which included DAG Ventures, The Founders Fund, Benchmark Capital Shasta Ventures, First Round Capital and Sherpalo Ventures. Although the valuation wasn’t released, “it was a decidedly up-round” and it was “pre-emptive,” meaning Mint.com wasn’t running out of cash. This brought Mint.com’s total funding raised to date to $31 million. The company’s Series B was led by Benchmark Capital; Series A was led by Shasta Ventures; and their seed round was led by First Round Capital.

Mint said it will use the funding to hire more engineers and to speed up product upgrades and partnership launches that are planned for the next 6 to 12 months. Mint’s revenues are undisclosed, but sources claim revenue is up 8x year-over-year.

Not a bad way for an internet 2.0 start-up to spend its summer of 2009, right?

For those a bit unfamiliar with Mint.com, it’s the leading online personal finance service, now with over 1.4 million registered users. It’s got plenty of mass appeal, especially in the current environment where people are scrutinizing their spending, tightening their belts, seeking savings and spending more time strategizing how they’re going to achieve their financial goals. The company claims that users are presented with an average of $1,000 in savings opportunities in their first session. The platform is extremely user friendly, robust, and now mobile having recently released an iPhone app.

There’s no user fee but there is a hidden price. Users must be willing to entrust Mint with their personal data which Mint makes anonymous and sells to companies interested in tracking consumer data trends in discretionary spending, financial investment and personal banking. Mint tracks over $175 billion in transactions, $47 billion in assets and has identified $300 million in potential savings for its users. Mint claims that personal information is safe as it doesn’t track the identities of its users, so there’s no danger of personal data being revealed.

Mint’s potentially sitting on some valuable information according to 30 year old CEO and Founder Aaron Patzer. “If Mint has a record of everything people have spent in the past and the record of what they want to spend in the future, that’s a pretty damn good position to be in,” he said in an interview. He also felt that “now that we have a sampling of about 2% of the nation’s online households, we can see some interesting economic trends, and are establishing ourselves as a source of close to real-time insights into the US economy.”

This information is increasingly valuable as Americans are spending less and remain unsure of an economic recovery.

In Gallup poll released earlier this week U.S. consumers chopped their average spending by more than 20% for the week ended Aug. 23, versus the seven-day period finishing Aug. 9. — to $62 from $79 US. Equally troublesome, Gallup noted that U.S. economic confidence also fell in the third week in August, with only 36% of respondents saying the economy was getting better. That result was 4% lower, compared with the week of Aug. 9th.

But who needs Gallup polls which pose questions to a 1,000 person sample size when you can tap the spending habits of Mint.com 1.4 million user base in real time?

As Mint’s user base increases, so does its sample size and therefore accuracy. In addition, Mint’s extremely detailed up-to-the-minute user information could help Wall Street traders, ad agencies and buyout firms find pockets of growth by revealing the sales of specific companies and industries. Looking for a low beta consumer stock to hedge your portfolio in a down market and have a hunch people may be washing down their worries with Diageo? Just check out whether this recession is causing people to down more shots of Johnnie Walker, Jose Cuervo and Captain Morgan via Mint.com.