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Not long after Ochon started, a start-up offering personal finance to business owners, Ankur Nagpal The company’s first product — a stand-alone 401(k) retirement account — is itself “not a venture-backed business,” he said. Although it has landed around 300 customers in that initial base, the entrepreneur is focused on expanding the service and trying to be more comprehensive and how business owners can think about money, more realistically.
“We still haven’t found a single user who feels confident or comfortable with their financial knowledge,” Nagpal said. Along with Solo 401(k) services, Ocho is currently a brokerage that allows people to invest in a variety of ETFs and stocks, has financial advisory support services and offers other types of accounts such as IRAs and health savings accounts.
Robinhood says it’s an app mostly related to buying and selling. Ocho hopes it will all be “buy and hold” as he retires. Ocho focuses on education and conservative betting. There will never be options to trade the platform. We are very conservative – for example, if someone wants to buy Apple shares on our platform, they certainly can. But before they do that, we urge them to consider buying an index fund because, historically, that’s a safer option.
Compared to Robinhood, Nagpal says, “Ideally we are very boring. “In an ideal world, I’d love someone you know, set up a bunch of automations to love, invest a certain percentage of his salary automatically, and we’d handle the rest. There is not much active trading. The company only makes money from an annual subscription fee of $299 per year.
It is very common in the fintech world for companies to refrain from being an “all-in-one solution” as they scale and expand their services to achieve scale. Ocho wants to eliminate some of that price competition, especially around customer acquisition costs.
Ocho is also disciplined around a specific budget: the company spends $0 on paid marketing, and plans to keep it that way for the next few years. Nagpal added that the nine-person team will not be hiring anyone this year and will continue to work with freelancers and contractors to handle demand at no cost.
For now, he’s looking to earn customers and brand trust by offering equity in the space to some of the biggest tech influencers and builders. Nagpal told TechCrunch that Ocho has raised a $4.5 million seed round led by Vibe Capital, which is Nagpal’s own venture fund. He said he got approval from all LPs and the round closed at a valuation of $12 million. The round includes investments from more than 200 techies, including Mercury’s Imad Akhund, Angelist’s Avlok Kohli and Elizabeth Yin’s Hustle Fund. Each investor is allowed to contribute a maximum of $10,000, which Nagpal says is key to helping them create an “army of stakeholders and supporters and people dedicated to our success.”
If you’re curious about the happenings in the venture world, you can reach Natasha Mascarenhas on Twitter @nmasc_ Or on +1 925 271 0912 signal. Identity queries will be honored.
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