Zogo Finance Teaches Teens To Mind Their Money

Zogo Finance Co-Founders Bolun Li (left) and Simran Singh juggle being full-time students at Duke and basically full-time employees of their startup.

Zogo Finance is working to change the way teenagers spend money.

Through its new app, the Durham-based startup is working to help improve financial wellness and responsibility for young people.

The company was founded almost a year ago in May, 2018, by Co-Founders Bolun Li and Simran Singh, two undergraduate students at Duke University.

“When I was a teenager myself, it was really difficult managing my own money,” Li said. “My parents gave me my own credit card and I was terrible with the money. There was a lot of conflict between me and my family over expenses, so I wanted to figure out how to fix that.”

The application has two key features: reflection and knowledge. In order to receive allowances, teenagers must complete educational modules.

“The reflection feature is embedding behavioral economic principles to learn and reflect on previous transactions,” Li said. “It will notify teenagers that two days ago they spent $10 at McDonald’s. Then it will ask, ‘How do you feel about that purchase today?’”

Li said the algorithm will prompt users with opportunity costs afterward and suggest alternative purchases that teenagers could have spent the money on if they didn’t impulsively purchase the earlier item. The opportunity costs and educational modules can make them feel regret and understand the importance of spending limited funds wisely, Li said.

In addition, they provide concrete definitions of overdraft fees through interactive examples.

“Say you went to a smoothie store and your debit card was at zero,” Li said. “When you buy a $5 smoothie, but the bank charges you $25 for overdraft fees, so now that smoothie cost you $30. The app asks, ‘Would you be happy with a $30 smoothie, or would you have skipped it?’”

Transactions are followed up with short questions about purchase satisfaction.

In addition to explaining the meaning of banking terms, teenagers learn other important concepts through Zogo Finance ranging from understanding the importance of savings to learning about borrowing money through payment plans and loans.

While Li and Singh are full-time students, they are also basically full-time employees for their company too, Li said.

Families at Durham Academy will receive an early version of the app this summer for beta testing. Zogo will also be providing personal finance seminars at Durham Academy.

The company also was accepted into the Melissa & Doug Entrepreneurs accelerator program at Duke, where they worked, learned and were mentored by nine Duke alumni. After the program, they received over $60,000 from angel investors, their second fundraising to date.

Quantworks in Chapel Hill created a joint partnership with Zogo Finance in August, 2018. The software company has over 15 years experience in B2B software development, which will help Zogo grow and improve their app.

While the app was created for teenagers, there is great interest from financial institutions to incorporate it into their mobile banking apps, Li said. Currently, Zogo Finance is close to closing a deal with a North Carolina credit union.

The service is currently free for parents and their children. The revenue model will come from Zogo eventually charging licensing fees to financial institutions to use their product.

A client they currently work with is a large government nonprofit, America Saves for Young Workers, which helps underprivileged teens become better at managing money.

“A lot of these kids don’t have parents at home,” Li said. “So the nonprofit is trying to provide them with accounts to become more financially independent.”

Li intrigued the judges, including Cofounders Capital’s David Gardner, at a Shark Tank pitch event at October’s Startup Summit. (See our story here.) Last month, Li attended and pitched his company at the CED Tech Conference in hopes of raising funding.

“We’ve gotten a lot of interest from investors afterward,” Li said. “I’ll be meeting with them in the coming week, so I’m looking forward to that.”

Zogo Finance is looking to raise $500,000 by May and sign deals with two financial institutions to pilot their app.