The Levo Financial team, which now calls Salt Lake City home, has UTC and Chattanooga ties. From left: Justin Clark (system architect), Zach McCormick (CEO), Nick McCormick (front-end developer), Dillon Martin (COO and head of compliance).
Since 2005, Y Combinator—a technology startup accelerator—has been used to launch more than 3,500 companies, including Airbnb, DoorDash, Dropbox, Instacart, Quora and Reddit.
Twice a year, Y Combinator invests $500,000 per company in many startups—accepting only 1.5-2% of more than 15,000 companies that apply each cycle—working intensively with the companies for three months to get them into the best possible shape and refine their pitch to investors. Each cycle culminates in Demo Day, when the startups present their companies to a carefully selected, invitation-only audience.
The current cycle, known as YC Summer 2022 batch, has a University of Tennessee at Chattanooga link.
Dillon Martin, a 2017 UTC graduate with a bachelor’s degree in finance, and Justin Clark, who received a master’s in computer science from UTC in 2019, are two of the four founders of a mobile financial app called Levo Financial—one of approximately 250 startups accepted into the summer cohort.
Martin and Clark are believed to be the first UTC alums to participate in Y Combinator.
“We wanted to get into YC because this is the pinnacle of startup accelerators; it’s the premier startup accelerator in the world,” Martin said.
The best elements of investing and banking are combined in Levo, a spendable investment account. It’s used similar to a checking account; your funds are invested in stocks and bonds while still being readily accessible through a debit card, along with other convenient banking features.
The appeal of Levo is that it offers an alternative to traditional bank accounts. Your financial requirements are satisfied without forcing you to give up investment returns.
“This solves a problem that we all have felt, and that problem is the issue of liquidity and having to transfer money between accounts and having to always hold something in cash,” Martin said. “ We really wanted everything we had to be able to be invested, but we wanted to have liquidity at the same time.
“We wanted to be able to spend and pay bills with our invested balances instead of having to just sit there and lose to inflation with a cash balance in a checking account.”
To date, the company has raised $1.6 million in funding en route to being accepted into Y Combinator.
“Their motto is ‘build something that people want,’” Martin said, “and that’s something that we believe we’ve done. This is something that resonates with a lot of people, and with the backing of Y Combinator, this gets us out there in a big way.”
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Six years ago during his time as a Gary W. Rollins College of Business student, Martin was president of the SMILE Fund (Student Managed Investment Learning Experience)—at that time a fledgling organization.
These days, he’s getting ready to present in front of 1,000-plus investors.
“Oh, gosh. I know. I talk to my parents about that all the time. It feels like 15 years have gone by,” he said. “It’s a very strange trajectory to have taken to reach the pinnacle here with a fully live startup.”
As the organization’s second president, Martin was there when the SMILE Fund gained traction. He said that experience set him on the path to entrepreneurship because SMILE Fund students are self-taught in many ways.
To keep up with everyone else in the fund, he said, you can’t wait for a professor to explain something to you in the classroom. You have to figure it out, just like with a startup.
“The SMILE Fund is the core element of my trajectory into the entrepreneurship world,” Martin said. “I spent a lot of time with Dr. (Hunter) Holzhauer and Dr. (Bento) Lobo, both of whom had a huge impact on me in the College of Business, and that’s because I had a lot of time with them outside of class.
“I particularly had a lot of time with Dr. Holzhauer. When he picked me to lead the SMILE Fund, we had a whole lot to build, a whole lot of new things. We were making up a lot of things as we went. And this aligns with kind of the startup methodology in that you’re just figuring it out along the way and you have to learn a lot.”
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After graduating from UTC, Martin worked at Merrill Lynch as a financial adviser before opening a hedge fund called Alpha Southern Capital.
A few months after Martin graduated, Clark came to UTC to begin a master’s program in the College of Engineering and Computer Science.
At the same time, he also was a member of a hedge fund group—White Oak Capital Management—along with brothers he had known since middle school, Zach and Nick McCormick. Clark and the McCormicks ran track and cross country together at East Hamilton High School in Ooltewah, Tennessee, before spending their undergrad years at UT Knoxville.
The members of the different hedge funds eventually met—the first time Martin’s and Clark’s paths crossed—and soon joined forces in early 2019.
Not long after that, Zach McCormick pitched the idea of Levo, a concept that “resonated with all of us,” Martin said.
In order to build and launch Levo, the four moved to Salt Lake City, Utah, the Silicon Valley of financial technology, in early 2021.
As one can expect with a financial technology company, there were regulatory hurdles to get around and infrastructure to build.
“It took us a year and a half to get to where we are today,” Martin said, “and now we have the app available for download.”
Martin said Levo’s four members wear many hats. He is the chief operating officer, head of compliance and head of growth. Clark is the system architect. Zach McCormick is CEO and head of product. Nick McCormick is lead developer.
Clark, who praised his College of Engineering and Computer Science thesis adviser, Hong Qin, and Professor Yu Liang, likened his role to putting out fires that may arise.
“The system architect role is kind of like backend infrastructure,” Clark explained. “I generally do the backend engineering and all of the orchestration of the services that we need to provide to our users.”
One of his principal responsibilities is monitoring “anomalous behavior,” he said. “For example, one of the things that every financial technology company has to worry about is fraud and fraud detection.”
He also pointed out the relative newness of working with serverless architectures.
“It’s kind of a new iteration of cloud computing where we are not having to maintain our own servers,” Clark said. “We rely on AWS (Amazon Web Services) to keep the systems running because that’s where their expertise is. There’s been this whole movement around serverless architectures because it makes things a lot more scalable.”
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Martin said Y Combinator is known for investing in founders, not companies.
With startups, so many things will change along the way, “but what’s really important is that there’s a core founding team that works well together and will last,” he said.
Levo is still in its startup stage. At one point, so were companies like Airbnb and DoorDash.
“That’s very wild,” Martin said of being mentioned in the same sentence, “but I would say the most impactful part of this is that we actually speak with these people. We can message them right now and speak with the CEO of Airbnb; they speak to us throughout the batch and do batch presentations. You can ask them questions and you can learn from their mistakes.
“It’s not just having a name mentioned with other great names; it’s that this network is a form of communication across very skilled people who have done something few people can.”
On Sept. 7, Martin, Clark and the McCormicks will present their company to more than 1,000 venture capital firms and angel investors invited by Y Combinator.
From there, the Levo team expects aggressive growth.
“We want to perfect the product, grow as fast as we can and build our company,” Martin said. “We expect to be bursting at the seams along the way. There are phases of this that—of course—you can’t know how it will look beforehand. We can prepare all we can before, but it’s going to be wild.”
As Clark said, “This product has the opportunity to change things and change how people think about money, especially younger people just starting their careers.
“I love being a part of this and helping bring it to life.”
