Japanese Personal Finance App Moneytree Raises $1.6M To Expand Into The U.S.

Moneytree, a personal finance iOS app, has received $1.6 million in seed funding led by DG Incubation (Digital Garage’s investment branch), with participation from private investors, including senior executives from PayPal, MasterCard and Morgan Stanley. The Tokyo-based startup will use the proceeds to expand into international markets, including the U.S., in 2014. An iPad version and responsive Web app are also in the works.

Moneytree (which is named after houseplants considered auspicious in Asian culture and is unrelated to the U.S. payday loan chain of the same name) launched in April 2013 and gained traction after being featured on the Japanese App Store. The app, which will support data from over 1,000 financial institutions by 2014, has been downloaded over 200,000 times and has aggregated data from over 15 million transactions since it launched.

Moneytree’s founder and CEO is Paul Chapman, an Australian serial entrepreneur. Chapman launched the startup after meeting co-founders Mark Markdad and Ross Sharrott while working at Tokyo-based professional services firm enWorld. Chapman sold his first company, e-recruitment company cvMail, to Thomson Reuters in 2007.

The app seeks to differentiate from other personal finance management platforms by integrating concepts from quantified-self tools like the FitBit. Though budget planning is one of the app’s features, Chapman says its emphasis is on helping people understand how they think about money.

“Moneytree aims to radically simplify your relationship with money, from the way we think about money, to the way we access related information and how we use it,” Chapman tells me. “Although Mint.com defined what a money app should be for 2009, a new definition suited to the smartphone/tablet era does not exist. We are working to make Moneytree the new standard for money related mobile apps.”

Moneytree competes with personal finance apps offered by Japanese banks by offering a more intuitive, mobile-based approach, instead of serving as a Web site extension.

“In Japan, most financial data aggregators are Web focused. They are designed for Web 1.0 and are not natively mobile,” says Chapman. “We believe money is an inherently personal interaction. Since the device we use for personal use is increasingly a mobile one, the right choice was obvious.”

Moneytree’s machine learning algorithms processes data from each person, as well as all users, to automatically categorize transactions. Other features include real-time tracking of cash spending, income and credit card usage, and advance notification of liability for all types of credit card charges (such as fees) to help users avoid unpleasant surprises on their monthly bills. Moneytree uses Amazon Web Services to help it scale. Customer login details are protected with 256-bit SSL encryption and stored in the AWS cloud, not on devices.

As Moneytree prepares for its U.S. expansion, Chapman says that it will begin planning to partner with third-party providers, like Yodlee or Intuit, in order to tailor its platform to the needs of American consumers. For example, its U.S. version will have fraud alert features, which aren’t a big problem in Japan.

“Our focus right now in Japan is on cash flow management. In making a version of Moneytree for the US, we aim to cover the three most important things to individuals: their cash flow, debt management and retirement savings,” Chapman says.

In the U.S., Moneytree will go up against a roster of well-established personal financial apps and sites. But Chapman believes his app’s approach, which focuses on helping users manage their personal finances by giving them insight into how they use money, will help it gain traction. He says the difference between Moneytree and other services like Simple, Moven, Mint.com, Check and MoneyDesktop is that Moneytree is not “accounting-centric.”

“Most of the time, most people don’t need budgets, they need perspective and peace of mind,” Chapman says.

Moneytree will continue to fuel its growth in Japan by using part of its seed round to focus on iOS development, which is a priority for the company because NTT DoCoMo, Japan’s largest mobile carrier, will begin offering the iPhone in September for the first time. The startup leverages expertise from a board of advisors that includes chairman Jonathan Epstein, the former head of PayPal Japan, Douglas W. Lorentz, former executive vice president of North Asia for MasterCard (Western Union Japan), Yasuhisa Tsuchihashi, former general manager of Sumitomo Mitsui Finance and Lease, and Nataha Mandie, the chief executive officer of Mandie Consulting and a former Credit Suisse executive.

The startup’s other plans include expanding into enterprise software by developing a market analytics service to help companies understand consumer behavior in different industries. Potential use cases include marketers who want to target ads and content based on financial profiling. Moneytree plans to raise its Series A round in the U.S. in late 2014.