Fintech startup Zero raises $20 million to offer consumers a reward credit card that acts like a debit card

Zero Financial, a San Francisco-based fintech startup, today announced that it has closed a $20 million Series A financing round to scale its Zerocard, the first reward credit card that act like a debit card, to the more than 200,000 people on its waitlist over the next few weeks. The round, which was led by New Enterprise Associates (NEA), SignalFire, Eniac Ventures, Nyca Partners, and Silicon Valley Bank, brings its total equity and debt funding to date to $35 million.

Zerocard combines the simplicity of a debit card with the rewards of a credit card. Zerocard lets you earn rewards without worrying about overspending. Zerocard immediately deducts any charges from your account’s outstanding balance, but also gives you rewards for all purchases. Zero is powered by a mobile app and Zerocard that comes in four levels with varying rewards of up to 3.0% cash back with zero of the most annoying fees of typical bank accounts. Zerocard immediately deducts any charges from your account’s outstanding balance, but also gives you rewards for all purchases. Zero partnered with WebBank, a Salt Lake City-based bank, to issue Zerocard. Deposits are held at Evolve Bank & Trust (a Memphis-based bank and Member FDIC) and insured up to FDIC limits.

Founded in 2016 by Bryce Galen and Joel Washington, Zero is a mobile banking experience consisting of an app, a credit card called Zerocard, and a checking account called Zero Checking.  Zero doesn’t charge annual fees, ATM fees beyond what the ATM owner charges, foreign transaction fees, minimum balance fees, overdraft fees or many of the other fees that you’ve come to expect from typical bank accounts. At the Carbon level, all ATM fees charged by the ATM owner are refunded.

Called “A better overall offer than almost any credit card,” by The New York Times, Zero is banking built for today’s consumer needs. It’s a replacement for your old-school bank, built by combining a rewards credit card called Zerocard and an FDIC-insured checking account called Zero Checking. Unlike any other product before it, Zero finally lets you “bank like debit and earn like credit.”

The Debit-style Experience, unique to Zero, displays transactions from Zerocard and Zero Checking together in the Zero app, with one net number to spend from. Customers also get the benefit of a system that prevents unplanned or unwanted overspend.

Transactions are enhanced with logos and maps, making it easy to recognize purchases. For customers who still have questions, Zero’s support team is always available, with 24/7 support from its operations center in California.

“Few people understand how complex it is to launch a credit card or a checking account program,” said Rick Yang, Partner at NEA. “Zero is the first US startup to launch a fully integrated and elegantly designed product with both from scratch. Importantly, Zero gives consumers the ability to fully control and understand their own spend, without compromising on rewards — something that traditional account options have failed to provide.”

Zerocard is a World Mastercard, so it earns credit card cash back. Customers start out with a Quartz level card, earning 1% cash back on purchases. They tell their friends. When a friend joins and qualifies, the customer gets a higher-level card called Graphite. Two friends to get a solid-metal Magnesium level card, and four to get a Carbon level card, also solid metal. Graphite earns 1.5%, Magnesium earns 2% and Carbon earns 3% cash back, on all spending categories. To receive the full cash back rate at the Graphite, Magnesium, and Carbon levels, the Zerocard full statement balance must be paid by the due date from the customer’s Zero Checking account. Learn more at zero.app/rewards-agreement.

“Apple recently made headlines by saying they’re launching the first credit card that encourages you to pay less interest,” said Bryce Galen, Founder & CEO of Zero. “I think we’ve done one better and launched the first credit card that encourages you to pay no interest.”

“If you’re someone who spends $30,000 a year and maintains an average of $30,000 in deposits, you’ll earn $0 in cash back and interest with a typical debit card and non-interest bearing checking account, and $1,425 a year with your Zerocard Carbon1,” said Joel Washington, Founder & COO of Zero. “And it takes just a few minutes to sign up.”