Startland News’ Startup Road Trip series explores innovative and unusual ideas that are succeeding in startup hubs across rural America and the Midwest outside of metro Kansas City. This series is made possible by the Ewing Marion Kauffman Foundation, which is leading a nationwide collaborative effort to identify and remove barriers, large and small, to the creation of new businesses.
LINCOLN, Nebraska— A The Midwestern tech startup that leveraged its teenage founder’s peer and investor networks is poised to impact the cap table after a headline-grabbing tech controversy, a pivotal game-changer the deal and a half-million dollar pre-seed infusion.
“It was kind of a surprise for us,” Luke Moberly said of Bumper’s recent $500,000 pre-seed round. “I had never seen this amount of money in my life before.”
Summary in seconds: Bumper is an educational investing app for teens. With just $1 and an adult sponsor, teens can start investing in their favorite businesses and markets before they turn 18.
Bumper – which started as a life insurance solution for parents before focusing on personal finance for young people – is the first commission-free investment app designed just for teens. Users actively manage their own investment portfolios, learning about budgeting, diversification, compound interest, and other aspects of the process.
Bumper’s idea began when Alex Kearns, a college student from Moberly’s hometown of Lincoln, committed suicide after seeing a false negative balance of over $700,000 on his Robinhood trading app. National and tech media attention on meme trading in early 2021 further underscored the danger of certain investment tools, Moberly said.
Click on here to learn more about how Kearns’ death set off a domino effect within the investment tech community.
“Bumper’s goal is to financially prepare teenagers at a young age so that they are better able to navigate the crazy world of money management,” the Bumper founder described. “We believe it’s better for teenagers to learn how to invest now rather than waiting until they’re 18 to gain access to potentially dangerous financial tools.”
Until now, most responsible investing apps have been inaccessible to them, he continued.
“Investing at a young age can help you identify your tolerance,” Moberly said, noting the ups and downs of investing and the need to manage short- and long-term risks — and potential rewards.
Click on here to explore Bumper, which is available on desktop and iOS devices.
The first $100,000
Thanks to the COVID-19 pandemic, Luke Moberly’s gap year between high school and college took an unexpected entrepreneurial turn. His plan to study Spanish in Uruguay failed, so he looked for new options.
While in London for a coding bootcamp, Moberly received an email from his banker Union Bank & Trust regarding the gener8tor-powered NMotion Venture Studio in Lincoln.
He decided to apply and got his spot after competing against 162 other applicants.
Growing up in Lincoln, Moberly himself knew nothing about investing until he was 18. It wasn’t until he opened a Roth IRA and started following the market that he got hooked, he said.
Moberly’s banker referred him to gener8tor’s NMotion Venture Studio, where startups can receive $100,000 plus mentorship opportunities, for joining the 16-month program. NMotion marked a turning point, providing a financial foundation, as well as the birth of Bumper’s development team, Moberly said.
“Bumper’s progress and growth in such a relative period of time has come from many different factors. people and organizations leveraging complementary strengths,” said Scott Henderson, Managing Director of NMotion, “What’s equally exciting is that Bumper is just one of 10 businesses we’re building from the ground up with $1 million in capital this year – so keep your eyes peeled open for more stories like this.
Click on here to learn more about NMotion, Nebraska’s premier startup accelerator.
Less than eight months after completing the program, the Moberly startup secured the $500,000 round with the help of Invest Nebraska and Nebraska Angels and Wisconsin-based Lancaster Investments.
“We chose to lead the investment cycle because Bumper is a unique combination of a outstanding founder paired with a bold goal to solve a problem that no one has been able to solve and do it in an intelligent and differentiated way”, explained Ben Williamson, director and general counsel for Invest Nebraska.
Funds from the investment are now being used to create a more effective app that caters to both teenage users and their parents, Moberly said.
“Parents are always involved,” he said. “For a teenager to invest legally, the parent must be the ultimate executor. We’re still in it [original] space, but it’s much more interesting for us.
Guided by teenagers from the start
Developing Bumper’s core mission came with vested interest from Moberly’s peers, he said.
Moberly started by sending out direct messages to around 200 people who it said would like to use the app. Of this pool, about 10% gave the idea positive feedback.
“From there, we started running Instagram ads and partnered with a few smaller influencers,” Moberly said. “We also did a few presentations at high school investment clubs.”
After a few hundred interviews with students, the team came up with a waiting list with a few thousand teenagers and college students, he said.
“That was enough to give us the confidence to build the app,” Moberly detailed. “We had about 30 teenagers on the app. Once they had a funded account, they were very engaged. The problem was simply to entice them to invest in advance.
The product was finally launched this fall.
Two of Bumper’s six team members hail from Nebraska, and the startup’s construction work has essentially spread across the country.
“We are just getting started and have already started putting the investment cycle in place for work,” Moberly said. “We are hiring frontend and backend developers and we will support our sales and growth efforts to reach as many Gen Z teens and their parents as possible.
Subsequently, Bumper is redesigning its parent portal to make it easier for parents to see where their children are investing.
“We’re also working on adding more features to the app to provide more advice on what to invest,” Moberly said. “We don’t give explicit advice, but we think allowing teens to see what their friends are investing in can make it less stressful.”
Improve financial literacy
In addition to the app, Bumper offers an ambassador program, Moberly said.
“We work with about 50 teenagers a week to teach free finance classes,” he said. “They usually come as marketing interns. They help us get into schools or find clubs that might want to partner with us.
Another educational tool for parents and teens: Bumper Bites – a program through which teens can learn some of the financial buzzwords that might not be taught in school. Topics include budgeting, spending and saving, risk management, and diversification.
The goal is to encourage teens to feel comfortable starting early, Moberly said.
“Even waiting 10 years cuts the earning potential of your investments in half,” he said.
This story is possible thanks to the support of the Ewing Marion Kauffman Foundationa private, non-partisan foundation that works with communities in education and entrepreneurship to create unusual solutions and empower people to shape their future and succeed.
For more information, visit www.kauffman.org and log on to www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn