Scout Raises $2.6 Million to Turn Student Athletes Into Investors
Scout, an app designed to help people establish their first investment habits, recently raised $2.6 million in a seed funding round. So far, the company has focused on getting users on college campuses, and particularly inside athletic facilities.
Scout CEO Michael Haddix Jr., a former college basketball player and the son of NFL running back Michael Haddix, has toured the country educating athletes at 20 institutions and building an app to make it easier for them to develop a long-term plan.
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“They don’t have an income, right? So the standard idea of, Take 20% and put it here, doesn’t really apply to them,” Haddix said in an interview. But between cost-of-living stipends, academic performance benefits and sporadic NIL deals, college athletes do increasingly have money to play with.
Scout builds personalized “starter pack” investment plans for each user, mixing personal interests (food, gaming, luxury items, pets, tech, etc.) with diversified equities and bonds. Users can set up recurring deposits or have their “spare change” invested each time they make a purchase. The app also aims to educate along the way, while mixing in gifs, emojis and familiar language.
A number of athletes are investing in Scout itself. Chingona Ventures led the round, joined by OneTeam Partners, Chris Paul, Vernon Davis and Jimmer Fredette, alongside other venture groups (BDMI, OnDeck, Reach Capital, Gaingels, Hustle Fund, Alive VC and Broadhaven Ventures) and individuals (Tim Fong, Jay Kapoor and Kyle Hines). The startup plans to make money through subscription revenue and management fees.
“Financial education and encouraging young people to prioritize it has always been important and I have a unique opportunity and responsibility to use my platform to push that life-changing message to everyone,” Paul said in a statement. “Mike has been a trusted advisor to young athletes for a long time—but what really motivates him and his reason for launching Scout—is an underlying drive to motivate the next generation of kids from all backgrounds not only to succeed, but to take ownership and active participation in saving and investing for their future.”
In addition to educating athletes, Haddix hopes the players will “sort of be our flag bearers on campus,” given the formal and informal leadership roles they often fill in college communities. “I’m going to make sure that we’re helping those players that are getting these checks get on track,” Haddix said, “but also using them as an example for everybody.”
More than half of the app’s current users are athletes. The average user has around $5,000 in savings.
Investment app Public has also leaned into educating athletes with a specifically designed financial literacy program that includes $100 to get started, informational workshops and the potential to earn referral bonuses.
Scout is hoping to separate itself from other investment apps aimed at younger users with a focus on actively managed, recurring diversified investments over one-off trades, as well as other financial management tools like spending analysis. For instance, one demonstration shows how investing $12 per month that would otherwise be spent on fast food adds up in the long run.
“There are so many young investors that have either been spooked by the market or who don’t have enough information and are keeping money in saving accounts,” Haddix said. “So inertia is another big, big competitor.”
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