Savings for emergency expenses does not exist for many Americans. According to the Federal Reserve, 37% percent of US adults could not cover a $400 expense with cash or a cash equivalent; 25% pay for unplanned expenses using a credit card and then carry a balance; 12% percent of adults said they would be unable to pay the expense by any means.
With credit card interest rates above 20% and inflation causing many to live pay check to pay check, putting aside a “rainy day” fund of the recommended 3-6 months of living expenses is impossible.
SecureSave is out to change that dynamic. Founded in 2020, the Kirkland, Washington State-based company was launched by FinTech veteran entrepreneurs Bassam Saliba and Devon Miller, along with one of the world’s best known financial advisors Suze Osman. This founder’s journey is based on my interview with all three.
CEO Miller and CTO Saliba knew each other from the Seattle tech scene and in late 2019, they felt the time was right to join forces to start a business. “So, we both left our cushy corporate jobs and, and went full time unemployed to try and come up with a new idea. And as the Pandemic just started to hit, Bassam said, ‘Why don’t we just stop what we’re doing, watch the world for a little bit and be thankful that we have our health, we’ve got cash in the bank, because the vast majority of people don’t have either of those,’” says Miller.
Given his background in founding companies and working for financial technology companies, Miller thought about solving the problem by creating an emergency saving account service and what it might look like. He and then brainstormed with Saliba on how to build it. “We started to wonder, ‘Could you build a brand and a product for just emergency savings?’ But we decided we’re at the stage of our career where we’re more about what kind of impact can we leave on the world around us,” says Miller.
Along the way, the pair were introduced to the world’s foremost icon of the importance of savings, Suze Osman, by the Seattle-based venture firm Pioneer Square Labs (PSL). The only problem was that Orman had announced her retirement, moved full-time to her beloved Bahamas home with her long-time spouse Katie Travis following a brush with death following a health scare. How would they get her onboard?
“I always had this statement: The goal of money is for you to be secure. So, when Katie approached me and said, ‘Listen, I’ve been talking to this guy, he sounds legit. I think you should think about this.’ I said, ‘Katie, what is it that you don’t understand that I’m not interested in FinTechs especially right now.’ And so she said, ‘Well, you might want to know the name of the company.’ And I said, ‘What is it? And she said, ‘Secure?’ And I went, ‘Oh, I’ll talk to him.’ And that was the beginning of where we are today,” says Orman who would follow that conversation by joining the company as a co-founder. No silent partner, Orman is on every sales call, according to Miller.
Today, SecureSave describes itself as offering an employer-provided, emergency savings solution (ESA) at a lower cost than other workplace savings programs. Much like a Health Savings Account (HSA), Employer-sponsored emergency savings accounts help workers save for financial emergencies by automatically deducting an amount from each pay check and depositing it into a separate, FDIC-insured account. The company works with such organisations as Transamerica, Truist, Stearns Bank, Milliman and the San Antonio Spurs to name a few.
According to Saliba, the company is experiencing exponential growth. “Since we got the product out and we started letting employers use it, we’ve gotten basically from the first one or two customers having five employees. And then we got 10x to 50 employees, and we got a customer with 500 employees, followed by customers with 5,000 employees. And now we’re in the process of deploying for a 50,000 employer. So, it’s 10x progression all within a two year period, which is really unheard of with start-ups,” says Saliva
Given its growth and the founders high profile it’s not surprising that the company raised $14.5 million in venture funds to date. It’s most recent June 2022 Seed Round raised $11 million and was led by Truist Ventures. It’s previous Seed round for $3 million in January of 2021 as led by SeaChange. Additional investors include PSL, Stearns Financial Group and others.
However, this is no traditional VC investment play. All three co-founders made it clear that SecureSave was not a traditional FinTech VC strategy with a short-term pay-off coming from either acquisition or the public markets. “My job isn’t to be part of a FinTech that only wants to make money. My job is to help people, period, and especially people who don’t have any money,” says Orman.
SecureSave may stand alone in its singular purpose and altruistic mission to provide ESAs at a low cost, but they are not without competition. With Congress passing the Secure Act of 2022 providing regulatory and financial encouragement for employers to encourage savings, a host of well-funded start-ups like Even and Sunny Day Fund, as well as established players like Fidelity and BlackRock, provide alternatives to SecureSave. Yet Miller and team are undeterred, “It’s hard to compete against us, as Suzie points out, unless you’re all in on it in the sense of this is all we do,” says Miller.
Each of the co-founders’ journey to becoming entrepreneurs were different but had the similarities of having a family life that stressed entrepreneurship and the value of hard work.
Orman was born in Chicago to parents of Russian and Romanian origin. Her mother worked as a secretary for a local rabbi, while her Russian immigrant father worked in a chicken factory and managed a deli. She grew up knowing the struggles of working families and would go on to graduate with a degree in social work from the University of Illinois. She moved to California and then switched to personal finance and would go on to become a best-selling author and Emmy Award winning TV personality known for her constant advice to stay away from debt and save for the future. “I got to where I am today, by always doing what was right, versus what was easy and by always putting people first before money,” says Orman.
Miller grew up in Washington State, the son of a dental technician dad and schoolteacher mom. He enjoyed watching his dad work and from an early age was inventing ways to create jobs for himself to make money. After graduating from Western Washington University with a degree in industrial technology, he would launch his first startup. He would go on to start several businesses that had successful exists. “I think being an entrepreneur was something I was taught and trained for and exposed to forever. My wife was the same way. Her dad was an entrepreneur when she was in high school and has been ever since. And so it’s just part of the DNA. And I think we just think differently. And that’s something that, you know, credit to her as well. She’s always been very supportive of when I say, ‘I think I’m going to quit my job and go do another startup’, says Miller.
Saliba grew up in war-torn Lebanon where traditional jobs were few and far between. His father drove a bus and opened a garage to service the bus and other vehicles. “So to me, having your own business is the primary goal to where you have control,” says Saliba. After graduating from college, he moved to the US when he got a job at Microsoft as an engineer and left after 10 years to launch his first start-up, which was acquired by WebMD prior to SecureSave.
As for the future? “SecureSave’s purpose is deceivingly obvious, which is people need money in their bank account for when things go wrong. We really think that we can be at the tip of the spear to make sure that happens in this country and maybe others, and that will have a profound impact on society. And that’s what we’re hoping to do,” says Miller.
Orman points to even higher aspirations. “I don’t need any more money. I’ve won every award. If you look at my Emmys, everything, there has been one thing that I’ve wanted forever, a Nobel Peace Prize. And I believe from the bottom of my heart, that if the three of us can solve worldwide poverty, by doing what we are doing, one day the three of us will, whether it’s 10 years from now or 50, we’ll win something that is worth more than all the money in the world.”
Read the full article here
