The app EarlyBird, which enables friends and family to invest in kids, has secured $4.5 million in a seed extension round, with some of the money coming from its user base. Through the app, parents may open a custodial account—also referred to as a UGMA (Uniform Gifts to Minors Act) account—which enables them to make investments on their child’s behalf in stocks, bonds, mutual funds, and other assets. The investments belong to the child after they reach eighteen. The money can be saved for retirement, a down payment on a house, starting your child’s first company, vacationing, and other purposes besides education.
Jordan Wexler, the founder and CEO of the startup, told TechCrunch in an interview that the company thought it had an intriguing opportunity to test its community outside of the traditional crowdfunding platforms and see if they would want to invest in the round because EarlyBird is a community-based investing platform.
“As this round began to come together, we realized there might be a neat way for us to open up a specific allocation for the parents who are actually making these investments in EarlyBird, so that the parents who are making these investments actually invest in the platform that’s investing in their children,” explained Wexler. “We conducted a feeler email campaign among our user base, and the response rate was unprecedented for such a survey.”
The company subsequently made the allotment available, and it was filled within the first 48 hours. Wexler asserts that creativity pays off and emphasizes the need to be innovative and engage with the community to thrive in the current startup landscape.
EarlyBird’s previous seed round investors, including 776 Ventures, Fiat Ventures, and RareBreed Ventures, all contributed to the financing round, which IDEO Ventures handled. ResilienceVC, Sweater Ventures, Alumni Ventures, Goodwater Capital, Wintrust Bank, Lightspeed Scout Program, and Parallel were the other investors in the round.
With this most recent fundraising round, the firm has raised $10.9 million. In November 2021, EarlyBird completed a $4 million seed investment round, while in November 2020, it finished a $2.4 million pre-seed game.
Since the platform offers more than investment, EarlyBird intends to use the funds to increase the startup’s emphasis on community-based investing. According to Wexler, the startup’s social aspects stem from discovering that raising a child is a highly emotional endeavor. For example, you may make a video clip that contextualizes the investment each time you make one.
Over the past several years, Wexler observed, “Parents have begun to use this to catalog all these special moments with their child.” For example, a mother who received a promotion and wants to celebrate may spend a one-time fee to record a video message to her child discussing the achievement. Thus, EarlyBird becomes this focal location where you construct this time capsule.
EarlyBird will also use the funds to concentrate on its following investing service interface. Currently, the firm allows parents to invest in one of five managed portfolios. In the future, EarlyBird hopes to enable the creation of several personalized portfolios, allowing a parent to select equities and do so alongside their growing child. Furthermore, the business is beginning to investigate how to integrate a 529 college savings plan within the EarlyBird program.
Although Earlybird’s target market is children aged 0 to 7, the firm intends to offer services for the entire lifespan, from 0 to 18+.
As their go-to financial provider since day one, Wexler stated, “We want to create a dedicated experience for a teen to be able to take ownership so that at 18, we become their primary brokerage account, and we take over the likes of any other larger financial institutions.” “And so, you keep investing with us, and then, naturally, your kids, and then the cycle begins all over again.”
