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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Wirex, which has 4.5 million users across Europe and Asia, launched its crypto-to-fiat services in the U.S. today to all U.S. users, except those in New York and Hawaii
The company is partnering with Zero Hash, Checkout.com, Visa, and Sutton Bank for the distribution of its crypto-enabled debit card
The launch comes 18 months after Wirex received its first money transmission license in the U.S.
Remember in 2020 when we wrote that Wirex was “inching” toward a U.S. launch? Well, the slow crawl is over; the cryptocurrency payments platform announced it has officially expanded its services to the U.S.
Wirex’s platform, which enables users to buy, store, exchange, and spend fiat currency and more than 37 cryptocurrencies, is leveraging partnerships with Zero Hash, Checkout.com, Visa, and Sutton Bank to distribute its crypto-enabled debit card to American users. The London-based company is expanding beyond the EEA and APAC regions, where it already serves 4.5 million users.
“U.S. users have been demanding an alternative to traditional forms of payments that are antiquated, slow and non-transparent, and that’s where Wirex steps in,” said Wirex USA Managing Director Harold Montgomery. “We’re known for upholding regulatory and licensing standards where required, and applying industry-best practices where regulations don’t yet exist. American customers can expect the same level of compliance.”
Founded in 2014, Wirex’s app links to a Visa debit card that allows customers to spend their cryptocurrency online and in-store at over 61 million locations. Additionally, the company offers free domestic and international ATM withdrawals, no annual fee, zero exchange fees, near instant crypto transactions, live transaction notifications, and the ability to instantly top up via their debit card with zero fees.
Today’s launch comes 18 months after the company received its first money transmission license in the U.S. from the State of Georgia Department of Banking and Finance. Starting today, Wirex’s services are available to users in all states except New York and Hawaii. The company said it will launch in those regions later this year.
In December of last year, Wirex launched its non-custodial wallet, an app within the Wirex ecosystem that serves as a secure way for users to send, store, and receive digital assets. Earlier that month, Wirex invested five billion Wirex Tokens in a new, cross-chain DeFi lending protocol called Nereus.
Wirex has almost $8 million in funding. Pavel Matveev is CEO.
Fiserv has agreed to acquire Finxact in a transaction valued at $650 million.
The acquisition will help bolster Fiserv’s position as “partner of choice” for firms looking to add to their digital banking offerings.
First Data Ventures, the corporate arm of 2019 Fiserv acquisition First Data, was an early investor in Finxact.
Leading fintech and payments company Fiserv announced today that it has agreed to acquire cloud native banking solution provider Finxact. An early investor in the company, Fiserv will purchase the remaining ownership interest in Finxact for $650 million, and will leverage the acquisition to add to Fiserv’s account processing, digital, and payments solutions.
“Through this combination, Fiserv will create a streamlined path for clients to offer digital solutions to their customers,” Fiserv President and CEO Frank Bisignano said. “Finxact also enhances our ability to support a growing number of financial institutions and business clients.”
Jacksonville, Florida-based Finxact offers a core-as-a-service platform that enables financial institutions to innovate and bring new solutions to market without requiring a complete technological overhaul of existing systems. Finxact leverages open banking APIs and the cloud to help firms future-proof and add flexibility to their businesses by abstracting the critical components of core banking from other operations and services – such as mobile banking, communications, and statements. The company’s partners range from financial institutions like Live Oak Bank ($8.2 billion in assets) and Iberiabank’s Virtual Bank to fintechs like Personetics and Anchorage Digital.
Calling the acquisition a “tremendous opportunity” for his six-year old company, Finxact Chairman and CEO Frank Sanchez said, “We recognize that Finxact’s technology can serve to level up the industry’s delivery infrastructure, and crucially at a time when banking is undergoing transformative change. We will be better positioned to serve a far greater number of institutions, of all sizes, when combined with the breadth and depth of Fiserv capabilities.”
Finxact was founded in 2016 and has raised $42 million in funding. The company ended 2021 with the introduction of its no-code visual Product Launchpad, a platform enhancement that brings a visual design experience to the creation and deployment of products on the Finxact core.
The acquisition of Finxact is only the latest fintech deal by Fiserv since its big, $22 billion purchase of First Data Corporation in 2019. Last fall, Fiserv announced the completion of its acquisition of marketing and commerce platform BentoBox. The year before, Fiserv acquired digital card services platform Ondot. Other recent acquisitions include its pick-up of Bypass Mobile in 2020 and NetPay in 2021. The company’s most recent Finovate appearance was at FinovateWest 2020, an all-digital event in which Fiserv demoed its Virtual Banking Assistant. The technology brings AI-driven, conversational experiences to call center operations, boosting customer engagement and reducing costs.
DeFi investment startup Pillow raised $3 million in Seed funding
The company will use the funds to fuel global expansion, build its investment strategies, and grow its user base
“We want to create a future where accessibility to decentralized finance is democratized,” said company founders
Pillow, a platform that invests in curated DeFi strategies, landed $3 million in funding this week in its first-ever investment round. The Seed round was led by Elevation Capital and a group of crypto angels. Pillow will use the funds to build out DeFi strategies, accelerate global expansion, build up its community of users, and grow the Pillow brand to reach a global audience.
Pillow was founded in 2021 to offer its users an accessible way to earn market-beating interest rates on a range of crypto holdings– including $USDC, $USDT, $BTC, and $ETH– without needing to be experts in the space. “We believe the next big unlock in Web 3.0 is going to come from significantly improving user experiences,” said Elevation Capital Principal Vaas Bhaskar. “Pillow fits right into that theme by abstracting away the complexities of DeFi – and hence making it more accessible.”
To remove the complexity, Pillow’s investment strategies are curated and actively managed. Additionally, the company offers 1-click investing with the potential of high yields and without transaction fees (known in the crypto world as gas fees) and underlying chains and tokens.
“We want to create a future where accessibility to decentralized finance is democratized, if not more than traditional finance. We’re fulfilling this vision by letting our users gain access to DeFi yield opportunities in a simple, safe, and secure manner,” said Pillow founders Arindam Roy, Rajath KM, and Kartik Mishra. “Our users have shown unequivocal faith in our platform in our private access program, and we’re on track to scale this to new heights. We’re grateful for the mentorship and guidance of Elevation Capital as we scale, along with some of the best builders in the Web 3.0 space … We’re elated to have the ecosystem rally behind us as we build our platform and community.”
Though decentralized finance seemed like a futuristic vision of the financial world in 2020, progress toward a decentralized world is quickly picking up steam. The total locked value in decentralized assets has gone from around $20 billion at the start of last year to around $250 billion this year. Additionally, last January, the U.S. Office of the Comptroller of the Currency (OCC) gave the green light to allow banks to use stablecoins. And many countries have either launched, piloted, or are in the process of planning their own bank-issued digital currency (including the U.S. Federal Reserve, which issued a discussion paper on central bank digital currencies last week).
According to a report from Medici, nearly 168 million people in the MENA region (Middle East and Northern Africa) do not have a bank account. In this environment, opportunities for both traditional financial institutions and new entrants are numerous. In some instances, financial services companies have launched their own digital banking portals in order to reach out beyond their current customer bases. In other cases, these firms have teamed up with challenger banks and innovative fintechs to help bridge the gap between the banked and the unbanked.
One of the challenges to reaching more potential customers in the MENA region has been regulatory, which makes this week’s news from the Central Bank of Kuwait (CBK) all the more notable. The CBK issued a set of guidelines for digital banks as part of a campaign to improve financial stability, encourage innovation, and help the country respond to its economic needs.
In drawing up its guidelines, the CBK relied on a study of the regulatory approaches taken by 25 central banks and 40 digital bank business models. The CBK noted that there were three main models for digital banking: as a unit within a traditional bank, a partnership between a bank and a digitally-based institution in which the bank manages core banking operations while the partnering institution manages customer relations and other operations, and as a standalone digital bank.
“The guidelines come in five parts covering the definition of digital banks, their legal framework, and licensed activities, as well as phases and procedures for establishment of digital banks,” CBK Governor Dr. Mohammad Y. Al-Hashel said. The new guidelines pave the way for interested parties to apply from now until June 30th. Initial approvals, according to the CBK governor, will be made by the end of the year.
For more on the digital banking landscape in the Middle East, with a particular focus on neobanks, check out this overview from Medici.
Speaking of central banks, the head of Argentina’s central bank, Miguel Ángel Pesce, recently gave an interview with the Buenos Aires Times. The main focus of the conversation was a preliminary agreement with the International Monetary Fund to deal with the country’s $44.5 billion debt to the organization. The agreement, which includes a pledge to reduce the country’s fiscal deficit as well as other measures, comes after a two-year negotiation process and still requires the approval of both Argentina’s congress as well as the IMF board of directors.
Yet it was Pesce’s separate conversation with Buenos Aires reporter Jorge Fontevecchia – published this week – that may be of greater interest to followers of international fintech. In that interview, Pesce explained some of the more controversial policies of Argentina’s central bank toward fintechs, including deposit insurance requirements for payment service companies. Pesce defended the practice as a way of “making more independent the assets of companies lending out the assets deposited in them” and of assuring that companies that serve as financial intermediaries are regulated as such. Pesce acknowledged that while this policy has engendered “some resentment in the short term,” it is necessary to ensure a “solid system” that banking services customers can rely upon.
In terms of innovation, Pesce spoke positively about the launch and adoption of interoperable QR codes, which were made mandatory in Argentina for all electronic invoices starting in late December 2020. He noted that interoperable QR codes could do to physical cash what electronic checks have done to paper checks (“a very important step in this direction”). And while he offered no timetable on the transition, “it’s going to end up happening,” Pesce insisted.
FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!
Here is our look at fintech innovation around the world.
Cross River Bank and PayTile announce collaboration to offer a new location-based payments solution.
The companies compare the new solution to Apple’s AirDrop, which enables the sending of data without an exchange of PII.
In addition to the partnership, PayTile is launching a new cash drop-off technology Money Drop.
A partnership between Cross River Bank and online payments company PayTile will bring a new location-based payments solution to market. PayTile is among the first P2P payment platforms to use geo-location to enable safe and private financial transactions between individuals without requiring exchange of personal information. The company will leverage core banking infrastructure and payments functionality – including ACH and Push-to-Card capabilities – from Cross River Bank for the new offering.
“PayTile’s mission is to make digital payments as private as cash and as safe as a card,” PayTile CEO Anu Vora explained. “While traditional P2P apps exist to pay the people you already know, PayTile exists to safely pay people you don’t know.”
PayTile’s technology is designed especially to be used in situations in which physical cash would be the preferred option. This includes tipping in hospitality-related instances, as well as informal transactions such as shopping at local farmer’s market. The company compares the location-based payment service to iOS’s “AirDrop” capability, enabling money transfers without requiring an exchange of usernames, legal names, emails, or phone numbers.
“Anu and the team at PayTile are revolutionizing peer-to-peer payments,” Cross River founder, president, and CEO Gilles Gade said. “By partnering with innovative companies like PayTile, Cross River creates real time solutions to empower consumers and their finances.”
The partnership announcement comes at the same time that PayTile is launching its Money Drop technology which enables the digital placement of cash or other digital goods at an exact location for users to pick up and redeem at their convenience. One use case of Money Drop, according to PayTile, would be for the company’s business partners to use the technology to draw a physical crowd to a specific location for promotional purposes, such as selling discounted tickets at an event location or offering rewards to commemorate the opening of a brick-and-mortar business.
Founded in 2008 and headquartered in Fort Lee, New Jersey, Cross River Bank ended 2021 with new collaborations with money movement automation platform Astra and payments firm Payment Approved. With Astra, Cross River Bank will power the first point-to-point debit transfer solution, offering instant payments via API. With Payment Approved, Cross River Bank will provide both the payments and technology infrastructure to support payments via Push-to-Card capabilities with both Mastercard and Visa. Cross River Bank will also serve as the sponsor bank for Payment Approved, providing clearing accounts, FBO management, and merchant acquiring services for the company’s business customers.
Blockchain technology company ConsenSys is acquiring MyCrypto
ConsenSys will combine MyCrypto’s tech with its own Web3 wallet, MetaMask
Financial terms of the deal were undisclosed
Blockchain technology firm ConsenSys made its seventh acquisition today. The Switzerland-based company is buying Ethereum interface MyCrypto, a California-based startup that helps users manage and store their crypto assets.
Specifically, ConsenSys will combine its Web3 wallet, MetaMask, with MyCrypto to improve security and standardize the user experience across desktop, mobile, extension, and browser wallets. MyCrypto launched in 2015 to help users unify their Ethereum accounts. Founded one year later, MetaMask offers its 21 million monthly active users a non-custodial crypto wallet for mobile and browser extensions.
“I think we’ll be able to provide a wallet experience that is much more able to help its users make the best decisions through this rapidly evolving Web3 wallet landscape,” said MetaMask Co-founder Dan Finlay.
The MyCrypto and MetaMask teams have collaborated since 2016. The groups have teamed up to educate the customers on security best practices and have helped integrate and maintain MetaMask’s phishing detection service. User security and education will continue to be a major priority. Moving forward, MyCrypto and MetaMask aim to prioritize user security and education.
“With the rapid growth of the ecosystem and products racing to ship slick features, it is imperative that the leading wallet continues to build foundational and secure self-custody tools that empower the user,” said MyCrypto CEO and Co-founder Taylor Monahan. “Combining our years of experience and shared values allows us to accelerate our mission of providing a way for users to fully realize their self-sovereignty.”
ConsenSys plans to eventually merge the MetaMask and MyCrypto features and brands. For now, however, they will operate independently. MetaMask Co-founders Dan Finlay and Aaron Davis, will lead the unified Desktop, Mobile, Extension, and Browser product offerings alongside MyCrypto founder Taylor Monahan. MyCrypto’s team of 12 employees will join ConsenSys.
In addition to many of the familiar faces who will be returning to London next month for FinovateEurope, this year’s conference also will feature a sizable number of newcomers to the Finovate stage. Here’s a brief introduction and welcome to these FinovateEurope speakers to whet your appetite for what we have in store on both our Digital Kick Off Day of March 15th and during the conference proper on March 22nd and 23rd.
With more than 20 years of experience in advisory services within Swedish bank Handelsbanken, Malin Lignell currently works with the company’s Digitalization and Innovation team to enable greater innovation and focus on the bank’s digitalization journey. Having a keen eye on the way emerging technologies influence customer behavior and drive new business models, Lignell will lead a Fireside Chat as part of FinovateEurope’s Digital Kick Off event on March 15.
Author of The Fifth Industrial Revolution, Inma Martinez will provide FinovateEurope’s Keynote Address on Wednesday, March 23rd. Martinez is a digital pioneer and AI scientist, as well as a member of the Expert Group at The Global Partnership on Artificial Intelligence (GPAI), an AI-based initiative sponsored by the OECD and G7. An advisor to business and government leaders on how to turn digital transformation into competitive advantage and contribute to social progress, Martinez will share her insights on creating an exceptional customer experience via UX-led design. Borrowing from the successful experience of technology giants, Martinez will explain how financial institutions can pivot away from a product focus to a customer focus by “unlocking data” and enhancing customer engagement.
Here are some of the other newcomers who will be joining FinovateEurope as part of our Power Panels, roundtables, and Executive Boardroom sessions.
Radboud Vlaar. Founder and Managing Partner at Finch Capital, Vlaar will join our Future of Fintech power panel on our Digital Kick Off, Tuesday, March 15.
Our Executive Boardroom on Financial Inclusion on Tuesday, March 22 will feature five fintech experts, all of whom are newcomers to the Finovate roster.
Anette Broloes. Fintech analyst with Broloes Consult.
Natalie Ledward. Head of Vulnerable Customers, Monzo
Sanghamitra Karra. EMEA Head of Multicultural Client Strategy & Multicultural Innovation Lab at Morgan Stanley
Neha Mehta. Founder of FemTech Partners
Ahmed Karsli. Founder and CEO of Papara
Tuesday will also feature an Executive Boardroom on Financial Crime. Among the new faces on this panel are Jane Barber, Regulatory and Trade Association Lead, NatWest Group; and Nitzan Solomon, Head of Surveillance & Financial Crime Technology EMEA, Nomura.
Wednesday morning will feature a pair of Power Panels with a number of guests who will be appearing on the Finovate stage for the first time. Our panel on achieving digital acceleration includes newcomers Christoffer Malmer, Head of SEBx at SE; Gunter Uytterhoeven, Chief Customer & Innovation Officer at AXA Next; and Carol Hamilton, Senior Vice President of Global Solutions at Provenir. Making their Finovate debuts as part of our panel on fintech collaboration and partnerships are Janine Hirt, CEO of Innovate Finance, and Thea Loch, Head of Strategic Design with Lloyds Banking Group.
FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!
According to Fintech Adoption Index’s research, one-third of all consumers globally utilize at least two or more fintech-based services, and the trend is growing. The fast-paced evolution of fintech necessitates organizations to keep up and continue to provide services that clients desire.
If you’re already registered for FinovateEurope, taking place the 22nd and 23rd of March, you get it. Attending the industry’s premier demo show, whether in-person or digitally, grants you access to the best minds in fintech. Not only this, but also the depth and variety of content will set you up to make the best partnerships and crush the competition in 2022.
But regardless of whether you’re a die-hard Finovate fan who is coming to the event or if you’re simply curious to see what the event is all about, here are five reasons you need to be there.
Live and in person (plus a digital option)
We held our first in-person event since the pandemic last fall and we are thrilled to continue in-person events this year, as well. Seeing industry colleagues not only energizes us, it also offers room for spontaneous interactions that simply are not possible via video.
That said, if you’re not able to attend physically, we have a digital option for almost all of the content. In fact, we even have a bonus, digital-only day on March 15 that will feature a keynote, a fireside chat, and a power panel.
Sustainable approach
We are committed to running events which are both environmentally sustainable and socially responsible. Under our new FasterForward approach, we have embarked on a series of activities and commitments to ensure our events become more sustainable while also helping our partners and customers achieve the same. Specifically, we are aiming to become carbon neutral across our events by 2025, cut the waste generated through our events in half by 2025, and embed sustainability inside 100% of our events by 2025.
Speaker lineup
You won’t want to miss hearing our lineup of experts take the stage! We’ll have two full days of content plus the opportunity to network with some of the top names in fintech, including Chris Skinner, CEO of The Finanser; Louise Beaumont, Chair of the Open Finance and Payments Working Group at techUK; Olivier Guilaumond, Global Head of ING Labs and FinTechs at ING; and more. Be part of our audience to see the future of finance first.
You, our audience
When it comes down to what truly makes our shows great, it’s you, our audience. Fortunately, our agenda has a lot of built-in opportunities to network with your best fintech friends, meet new ones, and hold meetings crucial to your firm’s operations.
This year, we’ll host two special networking sessions, including a Women in Fintech Executive Boardroom presentation on Tuesday and an Ask Me Anything Q&A session with Inma Martinez, Author of The Fifth Industrial Revolution.
We’re back in London
After hosting FinovateEurope in Berlin in 2020 (just days before the pandemic hit), we’re headed back to London, our flagship location for FinovateEurope. This year’s event will take place at the Intercontinental O2, a new location for us. The expansive venue will offer us plenty of elbow room and is minutes from Canary Wharf, the headquarters location for many fintech startups.
San Francisco, California-based Banking-as-a-Service company Treasury Primeunveiled its new compliance solution this week. The new offering – a suite of compliance tools, resources, and guidance from regulatory experts – gives fintechs the ability to create and launch their own risk-based compliance programs in a matter of weeks.
The compliance suite has three main components. First is a toolkit that enables firms to customize their compliance program and have more control over the account opening experience. Second, the new offering provides for direct partnerships with bank partners rather than outsourcing compliance to third parties. And, third, Treasury Prime’s compliance suite includes guidance from regulatory experts on key issues such as Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance. Each of these features is tailored to the specific and unique risk profiles of individual fintechs.
Sheetal Parikh, Associate General Counsel and VP of Compliance Solutions for Treasury Prime noted that the rise of stricter compliance standards for fintechs make new compliance solutions for this industry all the more urgently needed. “Regulators now expect fintechs to adhere to the same level of regulatory obligations as banks if they’re going to be offering banking products,” Parikh said. “Our new solution provides fintechs (with) the sophisticated tools and expert guidance needed to quickly build a strong compliance framework that meets the robust compliance standards imposed on banks.”
To facilitate the new compliance offering, Treasury Prime had teamed up with a pair of regtech innovators, Alloy and Unit21. The Alloy partnership will bring compliance and identity management solutions for both KYC and AML via a single API connection. Courtesy of Treasury Prime’s partnership with Unit21, banks and fintechs will be able to deploy pre-configured rule-sets and models to monitor transactions for suspicious activity. Real-time collaborative alert investigation is also a feature of the Unit21 collaboration.
Founded in 2017, Treasury Prime was recognized last fall as “Best Banking-as-a-Service” platform at the Tearsheet Embedded Awards, and named to CB Insights Fintech 250 roster of top fintech startups for 2021. In recent months, the company has partnered with Emprise Bank ($2.3 billion in assets) to help the institution with its new embedded banking initiative. Treasury Prime also teamed up with women-owned Piermont Bank to help early stage startups go live with basic banking services as part of the collaboration’s Quick Start Program.
Treasury Prime has raised more than $31 million in funding according to Crunchbase. The company’s investors include QED Investors, Deciens Capital, Nyca Partners, Pacific Western Bank, Susa Ventures, and Y Combinator, among others. Chris Dean is co-founder and CEO.
U.K. digital bank Monzo is officially entering the U.S. market this week. The startup announced it’s now allowing U.S. clients to apply for a Monzo account.
Monzo has been in closed beta for the past 18 months, during which time it has onboarded thousands of new U.S. customers, processed millions of dollars of transactions, and gathered user feedback.
The company has launched new features inspired by this feedback, one of which is a salary sorter. This tool that helps users divide their paycheck, separating their spending, savings, and bills once their paycheck is received.
This week’s news comes after Monzo withdrew its U.S. banking license application last October. “While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the U.S. through existing partners and invest further in the U.K.,” a Monzo spokesperson told CNBC last year. “We have big ambitions for Monzo U.S. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.”
One of those “routes” is a partnership with a traditional bank based in the U.S. While Monzo is a fully licensed bank in the U.K., the startup is partnering with Ohio-based Sutton Bank to provide its U.S. accounts. Sutton will hold user deposits and provide protection with FDIC insurance.
Monzo was founded in 2015 and seeks to be a hub for users to manage their entire financial lives via its mobile app. In addition to financial management and budgeting, Monzo also offers a Mastercard debit card with no overdraft fees, no minimum balance, and no foreign exchange fees.
The digital bank has five million U.K. customers. This number is small when compared to competitor Revolut,whichcounts more than 14.5 million users. However, Monzo U.S. Product Manager Thomas George noted that it’s not just about the number. “We don’t believe it’s possible to build a globally impactful company without considering the impact we have on the communities we serve,” George said. “Too many people around the world lack access to vital banking services. So we’re also working to improve financial inclusion, support customers in vulnerable circumstances, and play our part in creating a more just society.”
Finovate kicks off its African-American History Month commemoration with a conversation with Rodney Williams, co-founder of SoLo Funds. Along with company co-founder Travis Holoway, Williams was named to Cause Artist’s “40 Social Entrepreneurs to Watch for in 2022.”
SoLo Funds is a mobile lending platform that brings borrowers and lenders together for peer-to-peer microloans – with terms set by the borrower. Headquartered in Los Angeles, California, SoLo Funds has processed more than 150,000 loans and served more than 400,000 customers since 2018. The company serves as a viable, non-predatory option for the nearly 80% of Americans who live paycheck to paycheck.
Featured in Tech.co’s “Seven Tech Startups to Watch Out for in 2022”, SoLo Funds in December became the only African-American owned fintech to acquire B Corp certification. This designation, granted by global nonprofit network B Lab, is given to companies that achieve a balance between “purpose and profit.” SoLo Funds earned a 10 out of 10 for its impact business model and 4.1 out of 5 for customer stewardship. “By SoLo Funds certifying as a B Corporation, it has met the highest form of verification for its commitment to people and the planet,” B Lab U.S. and Canada Director of Equitable Growth Andy Fyfe said.
We caught up with Rodney Williams to discuss SoLo Funds and its mission to improve the lives of “responsible, yet largely ignored” underbanked individuals and their families.
What problem does SoLo Funds solve and who does it solve it for?
Rodney Williams: SoLo Funds is a solution for anyone who has ever had the need for emergency funds. The unfortunate reality is that more than 6 in 10 adult Americans can’t afford $1,000 for an emergency expense. That’s over 100 million people, and oftentimes, it is our most vulnerable communities who bear this burden. Situations like this are why payday lenders have become some of the most prevalent businesses in the U.S., outnumbering the number of McDonald’s restaurants by a factor of two.
SoLo Funds was created to provide a new opportunity for cash-strapped Americans. As a first-of-its-kind, on-demand marketplace, SoLo puts borrowers in control by allowing them to access emergency funds in an average of 30 minutes. They are entirely in charge of the terms of their loan, including how much to tip lenders and how much to donate to SoLo Funds’ operations – a portion of which now gets reintegrated to communities in need through SoLo Causes.
This is the first time a financial platform has offered borrowers a completely voluntary fee structure. We aim to become the leading financial technology company for underserved communities who have been anchored down and left without options for too long.
What in your background gave you the confidence to tackle this challenge?
Williams: The inspiration for SoLo Funds grew out of my own and my cofounder Travis Holoway’s personal experiences. There were times where our parents would have an electric bill due on a Friday, but wouldn’t get paid until Monday, so we would have our electricity shut off because we weren’t granted a grace period. Other times, our parents had to decide between paying the bills or paying to fix the tire on the car. Travis and I grew up nearly 400 miles away from each other, but the older I got, the more I realized that these experiences weren’t unique to me.
Communities share a lot of similar qualities, but never has anyone tried to scale a solution for them. This was the inspiration for SoLo Funds, and what gave us the drive to bring the intimate knowledge of our communities to the world of FinTech. What has ensued is a product and solution for everyone.
SoLo Funds recently became the only African-American owned fintech to acquire B Corp certification. What does this achievement mean for SoLo going forward?
Williams: This was a huge milestone for SoLo Funds in its development. B Corp certification represents a balance of profit and values and, as a company working to achieve a more inclusive world, this not only serves as validation that we are doing that, but it also serves as a model. Fintech is not just for corporate bottom lines; it can be a tool that can truly democratize and build generational wealth for people who have been disenfranchised for so long.
Tell us about your favorite feature of SoLo Funds platform/technology.
Williams: As I mentioned, SoLo Funds was born out of lived experiences. This is decades of knowledge poured into a platform that provides a new way for people to learn and better their lives. The most remarkable thing about SoLo Funds is that it bridges the knowledge gap between what people are told about how to manage finances, and what they really should be doing to put themselves in the best financial situation possible. Because borrowers can set their own terms for their loans, they have the power to choose what and when they’ll pay. And we’ve seen tip and donation numbers go down as borrowers progress on the platform and understand what it costs to obtain capital.
SoLo provides an opportunity for people to learn and better their lives. This is a tool that changes peoples’ lives and gives them the ability to do what they want to do. Skills are transferable. SoLo is experiential. Books only get you so far, and there is always risk. Making bad financial decisions is a part of life. If we don’t start to teach the power of financial literacy, people will fail to understand why it’s so important.
You recently announced a partnership with Habitat for Humanity and United Way. How did this partnership come about and what are its goals?
Williams: We launched SoLo Causes to build on our work to serve folks in need. For our corporate philanthropy, we wanted to choose partners that would go out and do good in the communities in which our users live. Our first non-profit partners, United Way and Habitat for Humanity, match our values and impact our users’ communities. The program is dedicated to reintegrating potential profits into the communities that need it most. SoLo has committed that by 2023, 100% of our donation revenue will be distributed to non-profits. Ultimately, the goal is to reinvent how the system works for people. Once someone who lives paycheck to paycheck can stop worrying about paying for their next utility bill or fixing a leak in their home, they can start to build their lives and their wealth.
As a founder, what do you think is the most important factor when it comes to building a strong team?
Williams: A strong team has to be able to complement each other through their strengths, weaknesses, backgrounds, and experiences. This is the key not only to building a strong team but, at SoLo, this also is the key to building a team that provides the best services to our users. We believe that in order to meet our users where they’re at, we have to understand their needs and how they operate. SoLo users come from diverse backgrounds – nearly 60 percent of them identify as a minority, 60 percent report being female, and 40 percent of borrowers are low-income. Too many companies have tried to put these people in a box, forcing top-down approaches that are really the same traditional financial services repackaged. If we don’t create a team that can identify with the lived experiences of these people, then we will ultimately fail as a company trying to help them.
What can we expect from SoLo Funds in 2022?
Williams: SoLo Funds will continue to build a mission-driven business. Our B Corp announcement and the launch of SoLo Causes have solidified our commitment to underserved communities, but it’s just the beginning of what we have to come. We are working on a series of new banking services which we will gradually roll-out. These are meant to offer users the ability to build and sustain credit where they were previously excluded in the traditional financial system. Additionally, we are excited to launch a global mission. The United States isn’t the only place where access to emergency funds is an issue. We plan to launch SoLo Funds in our first global market, increasing financial accessibility for millions.
