The Black-Owned Fintech Startups On A Mission To Eliminate The Racial Wealth Gap

Working in venture capital after business school, Kelly Ifill has seen how difficult it can be for Black entrepreneurs to raise money through the earliest rounds of fundraising, known as the friends and family round, designed to help fledgling startups get off the ground.

As the cozy term suggests, founders are expected to secure investments ranging from $10,000 to $150,000 from trusted, well-heeled contacts to serve as seed money before moving on to more significant investments from angel and institutional investors.

But it’s not always easy for some groups to do this especially if you come from a low income household or your family live abroad.

In fact Ifill knew this issue firsthand because she had witnessed this issue firsthand.

She grew up in Brooklyn in a family that immigrated from Trinidad, and her relatives often struggled to raise funds to grow their cleaning, contracting, landscaping and bakery businesses.

Besides this – there are fewer banks in zip codes with higher rates of Black residents, which means that 46% of Black adults are unbanked or underbanked, making it impossible to build credit or secure a mortgage or business loans.

So earlier this year she launched Guava, a digital community bank for Black small-business owners to help them gain access to capital and narrow the racial wealth gap.

Introduced in a private beta version in January, Guava’s full rollout is planned for fall.

It just announced the closing of a $2.4 million pre-seed round led by Heron Rock.

But she’s not the only one looking to change the face of wealth.

Financial technology (fintech) adoption is growing like never before. Black-led fintechs are paving the way to improved financial tools and education among Black Americans.

Novae

Novae, a financial consulting and training company, has quickly gained notoriety for being the first Black-owned fintech company to offer ‘Buy Now Pay Later’ services for small businesses nationwide. The company has also released services in consumer financing and entrepreneurship opportunities to help customers to financial freedom.

MoCafi

Unveiled on Juneteenth 2020, MoCaFi is a digital banking platform designed specifically for the 50+ million unbanked and underbanked people in the US. In addition to low-fee bank accounts, it offers free financial coaching and homeownership counseling, as well as the ability to build credit with rent payments.

Capway

Raised in rural Mississippi, Sheena Allen knew what it was like to grow up in an underbanked area that lacked financial literacy. She created CapWay to help other financially underserved communities get access to the banking resources they need to succeed.

Breaux Capital

Breaux Capital (pronounced “bro”) is a “combination of software and community.” The online platform offers automated savings tools, accountability partners, and a suite of professional services to help Black millennial men build generational wealth and increase their financial wellness.

EnrichHer

EnrichHer is a lending platform that makes capital accessible to women and minority founders. The platform is comprised of accredited and non-accredited funders and also offers business coaching and a sense of community.