What

Moolah U is an Austin, Texas-based company building a money app that establishes smart financial habits for kids. Founded in 2007, Moolah U successfully designed and executed on money-education initiatives through individual programs as well as state partnerships, and has now expanded to deliver on its mission through a mobile platform and, eventually, a prepaid card solution. The company is supported by MassChallenge, and is currently raising a Seed round.

Why

According to Gayle Reaume, Founder and CEO of Moolah U, fintech has gone through several waves. The first wave involved digitizing core banking services, enabling quicker payments, mobile deposits, and other now-common features.

The second and current wave uses convenience to proliferate around a diversity of use cases—increasing the amount of money that people spend without increasing general awareness of how their money is spent or of their long-term financial health.

“We're just doing stuff that doesn't really work, and that's causing this trouble we're having, where it's just way too easy to spend without thinking about it,” Reaume said.

Even current financial-planning apps are “post-mortem,” Reaume argued, given that they don’t build healthy financial habits in real time. A third and upcoming wave of fintech, Reaume said, will help users develop long-term habits to boost their financial wellbeing, and will deploy behavioral science to build savings and wealth. Crucially, this involves starting young—especially as recent studies prove that simply teaching financial education does not significantly improve financial outcomes in the long run, while habit-forming instruction does.

How

Moolah U has successfully operated entrepreneur camps that, since its programs enjoyed front-page coverage in 2008 in the Wall Street Journal, have seen sufficient demand to warrant franchising them and monetizing accordingly. A decision to expand into a more technologized route through an app helps the company respond to parental input and expand on its mission while also ensuring more ongoing habit formation through a prepaid card, through which parents can apply learnings from Moolah U’s modules and help their children plan for specific financial goals by setting challenges and restrictions.

Moolah U had planned on bootstrapping and raising money for app development through its in-person programming—but the onset of the Covid-19 pandemic presented a major hurdle. Reaume treated the challenge as an opportunity for further entrepreneurial development with kids participating in Moolah U’s programs.

The company runs a practice entrepreneurial program for kids who graduated from Moolah U’s camps. Reaume approached the practice program and invited them to help the company re-operationalize and turn its programming virtual in order to meet the realities of social distancing and quarantines. The company and its teenage volunteers had three weeks to execute on this—“and we did it,” Reaume said. Moolah U’s virtual programming saw participation from six states at its launch, and by the end of the summer had children participating in six countries and in two languages.

Moolah U has built out its educational app in the time since then, and is currently in beta testing with around 200 users. It’s aiming to add card integration by the fall, letting kids as young as 7 gain access to a card and begin to develop healthy financial habits—with parental consent and active involvement.

“Want to build those habits at an early age,” Reaume said.