Stash, is a FinTech firm that offers a variety of financial products to American retail investors. It offers a variety of financial products, including the ability to buy different stocks, index funds, investment advice from a personal advisor, life insurance, debit cards, and more.

Stash earns money through subscription fees, rewards for cashback, payments for order flow and interest on cash. Stash, founded in New York in 2015, has become one of America’s leading personal finance apps. It is worth $800 million and has raised more than $300 million.

Stash is aimed at beginners, with the promise of making investing easier and more approachable. Users can get quality investment options for as little as $1-$9 a month. It may look like another investment app when you visit the website.

However, you’ll find a variety of features and budgeting tools that are not available on other investment platforms. Stash lets you manage your funds and save money.

Each Stash account includes a Green Dot Bank bank account. The bank account has no minimum balance requirement, no overdraft fee, and no monthly fees.

 

What is Stash?

Stash

 

Stash app, a mobile application and web-based platform, allows users to invest their money in stocks and exchange-traded funds (ETFs) as well as other securities.

The app is designed to make investment more affordable and accessible for those who are new investors or have limited resources.

Stash provides a variety of investment options including portfolios that are curated based on themes or industries specific, stocks, ETFs, and fractional shares.

Users can invest as little as $5, and set up automatic weekly or monthly investments. Additionally, if you want to develop a fintech app like Stash, then you hire dedicated developers.

Stash offers educational tools and resources to help its users make informed portfolio decisions and learn more about investing. This includes articles, videos, and a customized investment coach that offers guidance based on the user’s goals and tolerance for risk.

 

How Does Stash Work?

Stash allows users to invest in various securities via a mobile app or a web-based platform. For as little as $5, anyone may begin investing by signing up and connecting their bank account.

Stash provides a range of investment options including curated portfolios and individual stocks, ETFs, and fractional shares.  

Curated Portfolios are collections of investments based on specific industries or themes, like technology or renewable energies. These portfolios offer diversification and are managed by Stash’s Investment Team.

Users can select from a range of curated portfolios, or create their own portfolios by choosing individual stocks and ETFs.  

By purchasing fractional shares, users can invest in high-value stocks and ETFs. This makes investing easier for people with limited resources. 

Stash provides customers with informational resources that enable them to improve their investment knowledge and portfolio management. These resources include videos, articles, and a customized investment coach that offers guidance based on the user’s goals and tolerance for risk.

 

Stash Unique Selling Proposition (USP)

Stash is a good option for investors who are new to investing and need guidance. It will help ease their worries. Stash offers its plan for $1. This allows you to purchase shares and funds. 

You don’t even need to invest a minimum amount to start. Stash Smart Portfolio is also available to you when you sign up for one of the three plans.

 

How Does Stash Make Money?

Stash earns money by charging subscription fees to three of its plans. The three plans Stash offers include

  • Stash Beginner
  • Stash Growth
  • Stash+

Each plan offers a unique set of services and therefore requires a fee that is different. These plans offer personalized investment advice to each user. Users can get cashback and custodial account rewards.

Stash can also earn money by paying for the flow of orders. It is a controversial payment, but it is widely used by modern online brokers. In this case, Stash routes the orders to a market maker and customers can compensate as a result of the deal flow.

Stash generates money through the various cashback rewards available on its platform. Customers who use the Stock-back Card to make purchases at Stash are rewarded with cashback. You can earn up to 5% stock rewards if you’re a customer.

Stash can earn money by using a Stock-back Card, just as with any other rewards program. Net interest margin, or interest on cash, is another way the company earns money. Stats show that US banks have a 3.35 net interest margin as of 2019.

 

Stash Funding and Valuation

Stash uses the subscription model to offer investment, retirement, and banking services. Referral fees and returns on investments are also sources of revenue for the company. We’ll look at revenue generation mechanisms in greater detail. 

 

1. Subscriptions

Stash Beginner is the most basic plan, followed by Stash Growth and Stash+. Each plan provides varying levels of personalized retirement or investment advice. Stash+ is a premium plan that incorporates Stock-Back(r), a rewards system.

Stash will no longer charge plans based on assets in 2020. Users are now charged a flat rate for each plan, regardless of how much capital they have invested.

The company charges a 0.16% investment management fee for non-thematic funds and 0.25% for other funds. The cost of outbound transfers is $75.  

 

2. Cashback scheme

A percentage of the price paid by a customer using their Stash card is invested into that merchant’s stock. Stash charges a fee with every transaction that is eligible to connect the buyer and seller.

 

3. Payment for Order Flow (PFOF)

Users can compensate for the deal flow it brings in by a market maker when an investor uses Stash to place a stock order. PFOF is a controversial practice so the compensation amount isn’t public.

 

4. Interests

Stash makes use of cash in the accounts of members by lending it to other institutions. The net interest margin, or NIM, is the interest rate that the corporation gets in return from these institutions.

It is not clear what compensation Stash received. According to Statista research, the net interest rate margin for all U.S. Banks was 3.35%.  

 

Stash Business Model

Stash offers a variety of financial products for American investors. The business model of the company is based on memberships, cashback, interest on the account, and payment for orders. The system is based on referral fees, memberships, and returns from cardholders.

The subscriptions are divided into three different levels that provide various benefits for users. Overall, fintech app development is a crucial aspect of the Stash business model, as the app is the primary means by which the company delivers its investment services to customers. 

 

Stash: A Success Story

Stash, a financial tech company, provides micro-investing. The company was founded in 2015. Its mission is to make financial opportunities more accessible to everyone. Stash is one of the top investment apps in the market with over 5 million users. 

Brandon Krieg and Ed Robinson founded Stash. Both men worked in finance and noticed that people were intimidated when it came to investing. They wanted to build a platform to make investing easy and accessible to anyone.

Stash developed a mobile application that allows users the option to invest small amounts in different investment options.

The app stash was designed to be simple to use, and it offers a variety of investment options including individual stocks and exchange-traded funds they set out to create a platform that would facilitate investment for all people. (ETF) as well as cryptocurrencies.

Stash’s focus on education has been a key to its success. The company knows that many of its customers are new to investing and provides educational content in order to help them make informed choices.

The stash investing app offers a range of articles, lessons, and videos that outline the fundamentals of investing and aid users in comprehending the risks and benefits of various investment alternatives.

Stash has also been successful because of its low fees. It charges a $1 flat monthly fee for accounts under $5,000, and 0.25% annually for accounts above $5,000. Stash is a great option for small investors because of its fee structure.

Stash is also successful at attracting younger investors. It has partnered up with well-known companies like Uber and Blue Apron to give their employees access to Stash’s investment platform at a discounted rate.

The company has been able to reach a larger audience and establish a strong presence among Gen Z and millennials.

Stash raised an additional $112 million as part of a Series F round in 2019, bringing the total amount of funding to more than $300 million. It was able to keep growing its product line and make investments in cutting-edge technology thanks to the funds.

What is the Revenue of Stash? 

The company is not allowed to make its sales or profit numbers available to the general public. As it seeks to grow, the company will almost definitely continue to lose money. 

 

Stash Pros

  • Stash simplifies investing: If you’re new to investing and have some fear, Stash can help.
  • Stash has an affordable plan. For just $1 per month, you can buy stocks and ETFs.
  • Stash does not have a minimum investment requirement. You may begin investing with only one dollar. 
  • Access to a Robo-Advisor: With the Growth Plan or Stash+ you can access the Stash Smart Portfolio robo advisor.

 

Stash Cons

  • Stash is not free: While Stash offers an affordable plan for just $1 a month, most of the features in that Stash Beginner plan you can find somewhere else for free.
  • The high-end plan is overpriced: we don’t see the justification for paying $9 a month for the Stash Plus plan. 
  • The Stock-Back rewards program is lackluster: Stash has an interesting offer with its debit card: Instead of cash back, it’s “Stock-Back.” However, the amount of the reward does not compare with some of the best cash-back credit cards.
  • Some ETFs have high expense ratios: Do your homework before investing in ETFs offered through Stash because you might end up paying more than you should.
  • The user interface is confusing: There doesn’t seem to be a linear progression through the stock trading apps, which can make navigation confusing.

 

Stash-SWOT Analysis

Stash is the best trading app aimed at improving the financial literacy of new investors. This SWOT analysis will guide you through all the important aspects of Stash.  

 

Strengths

  • Stash is an affordable plan that eases the worries of beginners.
  • Users do not need to invest a minimum amount of money in order to start.
  • Stash Smart Portfolio is a Rob-advisor that you can access by subscribing to any of Stash Growth’s, Stash+’s, or Stash Portfolio’s subscription plans.
  • Forbes says that Stash is able to understand its customers at a deeper level, which allows it to attract more clients and raise more funds.
  • firms can manage nearly $2 billion worth of assets. 
  • Stash has registered more than 5 Million Americans as we speak.
  • In its three offices located in the US, UK, and Canada, the platform has employed more than 300 people.
  • Stash not only invests in users but also educates them through guides, tutorials, and personalized advice, as well as producing different investment products such as ETFs. 
  • Financial products are tailored according to customer needs
  • Stash’s portfolio recommendations will be tailored to your level of risk.
  • There are no commissions or stash investment app fees at Stash. 
  • Stash offers more flexibility than its competitors when it comes to investing, as you can buy hundreds of stocks using ETFs. 

 

Weaknesses

  • Other websites offer the same features for free.
  • Stash’s Debit Card offers Stock-Back which is not the same as the cashback that other credit cards offer 
  • It is hard to understand the user interface
  • Many users find the $9 monthly price of Stash Plus to be excessive.
  • Doing your research before investing in ETFs can save you money.
  • Stash is not a wealth management service

 

Opportunities

  • Coronavirus gave the company the chance to grow its business exponentially
  • Customers are investing large amounts of money in stocks, which is fueling growth for the company

 

Threats

  • One of Stash’s principal rivals, Acorns, provides subscription services with a comparable range of prices.  
  • Acorns offers free membership to college students. This can increase its popularity.

 

Is Stash Legit?

Stash is an online business that makes money through subscription fees. Beginner plans are $1 per month; growth plans are $3 per month, and Stash+ is $9 per month.

Apex accounts are another source of revenue for the stash investment. However, client fees are charged for any actions performed in their account. This generates additional revenue.

 

The Key Takeaways

  • Stash, an American financial technology firm, focuses on improving financial literacy among young investors. Additionally, Stash’s revenue is primarily derived from its subscription-based business model, which consists of three tiers. 
  • Each plan offers different access to personalized services and features. The company changed to a flat-fee plan in 2020 instead of charging a percentage of the capital invested.
  • Stash also benefits financially from the contentious Order Flow Payment practice, in which a financial institution acts as the customer’s broker. Stash Rewards also charges a percentage on eligible transactions.