There has always been a lot of green in banking, but it mostly involves those green bills that fold up in your wallet. However, in recent years, the color has taken on a new meaning: financial solutions built around sustainability. Green banking is no longer a fringe movement in the industry but a fast-growing sector involving dozens of startups and billions of dollars.
Look no further than the rapid growth at Aspiration Partners, a Los Angeles-based digital banking and fintech company whose platform provides sustainable options for consumers and businesses. Aspiration offers fossil-free deposits and debit and credit cards that reward customers for spending responsibly. Its mission is to help businesses and individuals manage their money more ethically.
There’s plenty of demand, judging by Aspiration’s recent financial results. During the first three quarters of 2021, its year-over-year revenue grew nearly 600% to $62.1 million, helping it earn a net profit of $6.2 million after losing money the previous year.
This year, Aspiration should increase those numbers thanks to a recent funding round and plans to go public. The funding round came on December 15, when Aspiration raised $315 million from funds managed by Oaktree Capital Management and affiliates of former Microsoft CEO Steve Ballmer. That announcement came a few months after Aspiration agreed to be taken public by blank-check company InterPrivate III Financial Partners in a special purpose acquisition company (SPAC) deal valued at $2.3 billion.
Aspiration said it expects cumulative net proceeds from the funding round to eventually top $700 million, including $200 million of private investment in public equity (PIPE) and nearly $260 million from the SPAC’s trust account.
In a press release, Aspiration CEO Andrei Cherny said a large amount of money involved “demonstrates a recognition” of his company’s business model and growth trajectory.
Aspiration’s investors don’t only include big names in the financial industry – the company also has gotten backing from actors Leonardo DiCaprio, Robert Downey Jr., and Orlando Bloom. Many are drawn to Aspiration’s sustainable initiatives and innovative business partnerships.
An example of the latter is its recent partnerships with Hanwha Life Insurance Company and Hanwha Solutions, subsidiaries of South Korean conglomerate Hanwha Group. Hanwha Solutions will use Aspiration’s reforestation program to sequester CO2 emissions and lower its carbon footprint. Meanwhile, Aspiration and Hanwha Life will work together to launch a blockchain ecosystem to help bring more transparency, scale, and liquidity to voluntary carbon markets.
Aspiration’s consumer banking lineup includes a “spend and save” debit card account that pays an annual percentage yield of up to 5.0% — an impressive return, considering that many large, traditional banks pay an APY closer to 0.02%.
Aspiration also offers a credit card with 1% cashback on all purchases for every month a customer’s spending gets to carbon zero. Aspiration plants trees to reduce the customer’s carbon footprint whenever the card is swiped.
Sustainability is a major selling point for Aspiration. Its website claims that every $1,000 transferred to its accounts from a big bank has an annual climate impact of up to 6,000 fewer miles driven by the average car. As of January 2022, nearly 18,000 metric tonnes of carbon dioxide were offset as part of Aspiration’s Planet Protection program.
The company works with reforestation partners worldwide to help restore and protect biodiversity, enhance native ecosystems, and support local communities. Its tree planting locations include Kenya, Mozambique, Madagascar, Honduras, Brazil, and the United States.