Petko Plachkov, Avi Patchava founders of Bright Money
Today on Fintech it is our pleasure to speak to Petko, the co-founder of Bright Money. Bright Money, is an artificial intelligence (AI) finance platform powered by its unique MoneyScience™ algorithm that helps Americans take control of their debt and start building real wealth. With its algorithm, Bright Money does all the data-crunching math and financial planning for each user. It works to outsmart banks and credit companies, so each Bright Money user always benefits from the best decisions for their money, thus democratizing user’s data to their benefit. Bright has successfully helped thousands of customers pay down credit card debt, improve credit scores and save towards a better future.
Who are you and what’s your background?
I am Bright’s co-founder. I have spent my whole career building digital financial products for consumers, helping to make financial services, simpler, more accessible and fairer. Before Bright I launched and scaled a BNPL FinTech, called CommuterClub, that helped consumers spread the cost of season tickets. I started my career with McKinsey (which is where my-cofounder Avi and I met) helping big banks build digital first products, such as retail banking and insurance. I co-founded Bright with Avi Patchava, a data sciences expert and Oxford University graduate with a decade of experience in using algorithms to solve consumer problems.
Outside of FinTech, I spend time with my wife and dog (Aussie Shephard) in Berkeley. I typically spend my weekends cycling or hiking around the beautiful Bay Area. Fun fact, I grew up in Bulgaria and Swaziland before coming to the US to study at Princeton.
What is your job title and what are your general responsibilities?
Co-CEO with my co-founder Avi. Day to day I focus on two primary goals 1) delivering a great user experience for our customers 2) growing our user base and expanding our coverage to include as many customers as possible.
Can you give us an overview of your business?
Bright Money is an artificial intelligence (AI) finance platform powered by its unique MoneyScience™ algorithm, designed to help Americans take control of their debt and start building real wealth. Bright Money’s technology allows all users to access highly customized financial plans — typically only available from financial planners who charge thousands of dollars — to pay down credit card debt, build their credit score and start saving. Bright Money delivers results for its users, with the average customer paying down $440 in debt in the first three months and saving $750 a year in interest. Bright Money’s patented platform has helped over 30,000 Americans to date, managing hundreds of millions in debt.
Tell us how you are funded.
Brightrecently closed its Series A, securing $31 million in funding from Sequoia, Falcon Edge and Hummingbird Ventures, alongside investments from prominent angel investors including Ram Shriram (Alphabet board member and founder of Sherpalo Ventures).
Why did you start the company? To solve what problems?
When we started building Bright in 2019, we set out to launch a unique system powered by data science to help Americans organize their finances and tackle their debt. We wanted to build a product that gave people real results — not just another finance product with a narrow profit view. We also realized the massive gap in the market, to offer middle income consumers tailored financial advice (as opposed to mass market products where one size fits all), to help consumers meet their goals. We wanted to use the power of data science, to give our customers hyper-personalized and tailored financial plans, typically only offered to the wealthy via dedicated financial advisors. We saw that technology made this possible, taking a users financial data and actually using to help them. This is our mission and goal.
Who are your target customers? What’s your revenue model?
The platform primarily helps hard-working, middle-income Americans — individuals between the ages of 25 and 40 who are making $50,000-$100,000 per year. These Americans have traditionally been underserved by banks and even recent “neobanks.” In contrast to existing services and products, Bright Money doesn’t just give users more loans or a one-size-fits-all product. Bright Money delivers highly individualized planning that responds and adapts to each user’s shifting finances, while also enabling intelligent automated payments that reduce debt and build wealth faster than most Americans can on their own.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
FinTech is innovating at an unbelievable rate but often the regulatory umbrella is very much skewed towards protecting incumbent players. This is not a dig at regulation, it is important to create protection for the consumer, but often times large incumbent players have massive advantages over new players by virtue of legislation (e.g., who can access payment rails or credit product). That slows down innovation and delivers worse customer outcomes. The regulatory system needs to be better attuned to nurturing innovation, delivering a level playing field and ensuring customers are getting high quality outcomes.
What is your message for the larger players in the Finance industry?
Technology and consumer needs will continue to drive rapid innovation in financial services. For many financial institutions, the initial reaction was some level of fear and complacency, but this is no longer true, and there is a real opportunity to partner and leverage the technologies built by FinTechs, with the scale of large incumbent players. A wave of consolidation, collaboration and M&A is almost inevitable as large players look to take the best of new technology and merge it with their existing platforms.
What phone are you carrying and why?
I carry both the new iPhone and Samsung galaxy, I need both to make sure our product looks great on iOS and Android.
Where do you get your industry news from?
I tend to cycle through the Financial Times, NYTimes and WSJ. Weekly I read the Economist for its global view and New Yorker for really great writing.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Sheel Mohnot – https://twitter.com/pitdesi who is also an investor in Bright and has great insight on the FinTech ecosystem.
Kunal Shah – https://twitter.com/kunalb11 who founded Cred in India and is one of the smartest consumer FinTech entrepreneurs I know.
Shamir Karkal – https://twitter.com/shamir_k The OG of neobanks with Bank Simple, always a great voice for new innovation in the market.
What’s the best FinTech product or service you’ve seen recently?
I have been using Acorns for several years, I love how simple the product is and yet how high impactful it can be, using spare change to invest. It’s brilliant, so easy to use yet gives access to equity returns. There is a lot we can take away from taking something complex and intimidating, and making it absolutely accessible to anyone at a low cost. I think this captures the FinTech opportunity.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
Fintech innovation is here to stay and will actually only accelerate. We are in a world where billions of capital is going towards FinTech and Defi creating real impetus to challenge the incumbency of the big banks in managing users’ financial lives. The disruption is not coming, it is happening now.
The next big step is to truly begin disintermediating the big banks, where layers of software sit on top of the traditional banking infrastructure – large banks will become like utilities but the user experience will be owned by nimble FinTechs able to quickly adapt to technology and user needs. Your money might still sit with Bank of America, but the user experience will be owned elsewhere.
Medium term, I am a big believer in Defi completely transforming certain consumer financial applications, such as payments and even lending.
