MoneyLion is a fintech company that offers lending, financial advisory, and investment services to consumers. Founded in 2013, MoneyLion's market is 17 million middle-class American consumers who used over 23 million products. The company's goal is to "rewire the financial system" and "give everyone the power to make their best financial decisions." In 2018, over 90% of MoneyLion members had become first-time investors and as of the end of 2023, MoneyLion Investing holds $11.4 million assets under management.

The company makes money through its loan business, lead generation from users on its site, and monthly subscription service. Individuals who use MoneyLion's services begin as visitors, choosing to either use the platform for free or to buy its premium consumer services via a premium membership and loan applications.

MoneyLion's Founding

The company, headquartered in New York City, was formed by a team of tech specialists and financiers, who developed the firm's analytics and machine-learning technology to offer tailored advice to individuals based on their spending patterns. MoneyLion also offers consumers access to small loans to help them manage fl✱uctuating mon༒thly income and expenses.

Customers receive points through a reward program for doing things like connecting a bank account or keeping their credit utilization low. MoneyLion's system mimics point-earning credit card programs like Chase Ultimate Rewards or Amex Membership Rewards.

Founders and Backers

MoneyLion is headed by co-founder and CEO Diwakar Choubey as of 2024. Choubey previously worked on Wall Street, where he held senior positions at firms including Goldman Sachs, Citadel, and Barclays. President and Chief Financial Officer Rick Correia joined MoneyLion in 2016 after serving various roles at Citadel. Tim Hong, Chief Product Officer, joined in 2015.

In a push to expand consumer banking services via mobile phone, in 2018 MoneyLion hired financial industry veteran, Jon Stevenson, formerly the head of alternative investment at Stifel Financial as the head of its banking and wealth management division.

The company operates out of four offices worldwide, including its New York City headquarters, Santa Monica (CA), Jersey City (NJ), Sioux Falls (SD), and Kuala Lumpur, Malaysia.

The company went public in September 2021 at a $2.4 billion valuation. Prior to going public, among its leading investors were Blackrock, Edison Partners, and Greenspring Associates. Other backers included Fintech Collective, Grupo Sura, and Danhua Capital. These investors helped MoneyLion compete with big and small fintech competitors.

Criticism of MoneyLion

As of 2024, the platform has a 4.3-star rating on TrustPilot, a popular consumer review website. The negative reviews criticize the company for problems with the handling of promotions, poor customer service, slower-than-promised fund transfers, and other account issues. The platform's growth, however, has been rapid despite these complaints.

Loans Becoming a Key Driver

MoneyLion generates revenue through its loan business, where the company has amassed 18.7 million customers as of Sep. 30, 2024. The company has managed to generate various accolades, including Best Financial Literacy Tool, according to Benzinga.

Fast Loans

In addition to providing tools to track spending, savings, and manage credit, the firm also offers lower-cost borrowing and investment services through its Credit Builder Plus subscription. This service offers loans of up to $1000 with interest rates ranging from 5.99% to 29.99% annual percentage rate without a credit check, payable over 12 months.

MoneyLion Plus Subscription Service

Launched in December 2017, MoneyLion Plus brings investing, borrowing, and checking accounts into a single, subscription-based, membership. MoneyLion automatically withdraws $79 from a consumer's account per month, depositing $50 into their investment accounts and taking $29 as a monthly fee.

Users get $1 cash back for every daily login, meaning that users who remember to sign on every day and scroll through a few screens essentially get the service for free. Its managed investment account moves saved money into a portfolio of ETFs and does not charge management fees.

Lead Generation Service

The startup also gets revenue from its lead generation business, which recommends other financial service offerings to consumers who may benefit from them.

Partners include related businesses like credit monitoring firms. MoneyLion also has sponsorship deals with organizations such as NASCAR. Its partnership with NASCAR provided cash back to users who made purchases of NASCAR tickets and purchases at its tracks.

MoneyLion's Competitors

MoneyLion heads off against a growing number of fintech platforms catering to consumers, ♕including digital finance companies LearnVest, Betterment, and Intuit. Meanwhile, as new tech startups shake up the traditional banking industry, older pla🥃yers are going on the defensive.

For example, in 2020 Cash App began piloting short-term loans of up to $200. The following year Block, the parent company of Cash App acquired Afterpay, a company that specializes in buy now pay later financing that allows shoppers to pay in installments for retail purchases. In 2024, Afterpay was integrated with the Cash App card.

The Bottom Line

MoneyLion is a fintech platform that s🍬pecializes in providing fast sho꧙rt-term loans to people with limited credit. However, borrowers should be cautious about the high fees and interest rates that can make these loans an expensive proposition.