Bits Of Stock CEO: Rewarding Customers With Shares Is Next-Level Shopping, Wealth Building

When you shop, you can build wealth. That's the thesis behind Bits of Stock, a startup that specializes in stock rewards and loyalty programs.

The company, backed by Keen Ventures and Yellow, the in-house accelerator program from Snap SNAP, recently teamed up with fellow fintech Ionia Inc. The partnership will grant Ionia access to Bits of Stock's technology and brokerage services to integrate stock rewards into their existing loyalty programs.

Benzinga followed up with Bits of Stock CEO Arash Asady, a former Marine and Wall Street trader-turned-entrepreneur, to learn more about the deal and how it works. Here's what he said:

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BZ: How do stock rewards integrate with loyalty programs?

Asady: Any business or financial institution that offers a rewards program can offer stock rewards as an alternative to a points program or as a points redemption option. When a customer swipes a credit or debit card or makes a purchase with a participating brand, they’ll get a percentage back in fractional shares of stock. That can be shares in the brand with which they’re shopping, a favorite stock of theirs, or even an ETF.

Is there any data that shows this is something that can boost businesses?

We piloted a Stock Rewards program in our own consumer app and partnered with a team of researchers from New York University Stern School of Business to analyze the data. In the app, users would earn a percentage back in fractional shares of stock when shopping with participating brands using an enrolled card.

The paper, presented at academic conferences late last year, found that every $1 in stock rewards increased customer spending by over $16. Customers that earned stock rewards increased their monthly spending with rewarding merchants by 51%.

Meanwhile, stock rewards recipients increased monthly transactions from reward-eligible accounts by over 19%. We already knew creating new pathways to get more Americans investing was good for consumers. With this data, we were blown away by the impact it could have for businesses.

Describe the road Bits of Stock has been on up until now: What was the fundraising process like?

My co-founder, Ryan Gary, and I met in grad school in New York and shared an obsession with the impact fractionalization could have on creating new pathways to ownership for more Americans. To test this idea, we developed a consumer app where users could earn stock rewards when they shopped with participating brands.

After partnering with NYU Stern on the study, we validated the powerful impact earning Stock Rewards has on consumer habits. In mid-2022 we started focusing on selling our technology to businesses to enable financial institutions, brands and loyalty providers to reward their customers in fractional shares of stock within their own platforms. Reception has been extremely positive.

The tech industry has been experiencing a lot of layoffs. Is Bits of Stock growing or hiring?

We are hiring. We’re getting powerful signals from the market supporting our business growth, and we’re bullish on the future. We’re an innovative company with decades of experience on our team, including Chief Revenue Officer Gary Arnold, who was global head of product marketing at PayPal; Goldman Sachs alum Adam Gleicher, our VP of marketing; and VP of sales Joseph Dahari, formerly of Fetch Rewards. The U.S. business team is also supported by an incredibly talented group of engineers based in Amsterdam.

What can we expect from Bits of Stock in 2023?

More partnership announcements to come. In the coming weeks, we’ll be announcing new deals, and are focused on scaling the business in 2023. Over the long term, we’re excited to tackle new asset classes, enabling businesses to reward their customers in fractional shares of NFTs, real estate — you name it.

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Arash Asady image courtesy of Bits Of Stock