Flourish, a startup that aims to help banks engage and retain customers, raises $1.5M

It’s not uncommon these days to hear of U.S.-based investors backing Latin American startups.

But it’s not every day that we hear of Latin American VCs investing in U.S.-based startups.

Berkeley-based fintech Flourish has raised $1.5 million in a funding round led by Brazilian venture capital firm Canary. Founded by Pedro Moura and Jessica Eting, the startup offers an “engagement and financial wellness” solution for banks, fintechs and credit unions with the goal of helping them engage and retain clients.

Also participating in the round were Xochi Ventures, First Check Ventures, Magma Capital and GV Angels as well as strategic angels including Rodrigo Xavier (former Bank of America CEO in Brazil), Beth Stelluto (formerly of Schwab),  Gustavo Lasala (president and CEO of The People Fund) and Brian Requarth (Founder of Viva Real). 

With clients in the U.S., Bolivia and Brazil, Flourish has developed a solution that features three main modules: 

  • A rewards engine designed to incentivize users to save or invest money
  • An intelligent and automated micro-savings feature where users can create personalized rules (such as transferring $15 into a rainy day fund every time their favorite sports team wins)
  • A financial knowledge module, where personal financial transactions and spending patterns are turned into a question and answer game. 

In the U.S., Flourish began by testing end-user mechanics with organizations such as CommonWealth and OpportunityFund. In 2019, it released a B2C version of the Flourish app (called the Flourish Savings App)  as a pilot for its banking platform, which can integrate with banks through a SDK or an API.  It is also now licensing its engagement technology to banks, retailers and fintechs across the Americas. Flourish has piloted or licensed its solution to US-based credit unions, Sicoob (Brazil’s largest credit union) and BancoSol in Bolivia. 

The startup makes money through a partnership model that focuses on user activation and engagement. 

Both immigrants, Moura and Eting met while in the MBA program at the Haas School of Business at UC Berkeley. Moura emigrated to the U.S. from Brazil as a teen while Eting is the daughter of a Filiponio father and mother of Mexican descent.

The pair bonded on their joint mission of building a business that empowered people to create positive money habits and understand their finances.

Currently, the 11- person team works out of the U.S., Mexico and Brazil. It plans to use its new capital to increase its number of customers in LatAm, do more hiring and develop new functionalities for the Flourish platform. 

In particular, it plans to next focus on the Brazilian market, and will scale in a few select countries in the Americas. 

“There are three things that make Latin America, and more specifically Brazil, attractive to us at this moment,” Moura said. “Currently, the B2B financial technology market is still in its nascency. This combined with open banking regulation and the need for more responsible products provides Flourish a unique opportunity in Brazil.”

Inside Workvivo’s plans to take on Microsoft in the employee experience space

Maintaining company culture when the majority of staff is working remotely is a challenge for every organization — big and small.

This was an issue, even before COVID. But it’s become an even bigger problem with so many employees working from home. Employers have to be careful that workers don’t feel disconnected and isolated from the rest of the company and that morale stays high.

Enter Workvivo, a Cork, Ireland-based employee experience startup that is backed by Zoom founder Eric Yuan and Tiger Global that has steadily grown over 200% over the past year.

The company works with organizations ranging in size from 100 employees to over 100,000 and boasts more than 500,000 users. According to CEO and co-founder John Goulding, it’s had 100% retention since it launched. Customers include Telus International, Kentech, A+E Networks and Seneca Gaming Corp., among others.

Founded by Goulding and Joe Lennon in 2017, Workvivo launched its employee communication platform in mid-2018 with the goal of helping companies create “an engaging virtual workplace” and replace the outdated intranet.

“We’re not about real time, we’re more asynchronous communication,” Goulding explained. “We have a lot of transactional tools, and typically carry the bigger message about what’s going on in a company and what positive things are happening. We’re more focused on human connection.”

Using Workvivo, companies can provide information like CEO updates, recognition for employees via a social style — “more things that shape the culture so workers can get a real sense of what’s happening in an organization.” It launched podcasts in the second quarter and livestreaming in Q4.

In 2019, Workvivo showed its product to Zoom’s Yuan, who ended up becoming one of the company’s first investors. Then in May of 2020, the company raised $16 million in a Series A funding led by Tiger Global, which is best known for large growth-oriented rounds.

Workvivo, which was built out long before the COVID-19 pandemic, found itself in an opportune place last year. And demand for its offering has reflected that. 

“Since COVID hit, growth has accelerated,” Goulding told TechCrunch. “We grew three times in size over where we were before the pandemic started, in terms of revenue, users, customers and employees.”

The SaaS operator’s deals range from $50,000 to close to $1 million a year, he said. Workvivo is Europe-based and operates in 82 countries. But the majority of its customers are located in the U.S. with 80% of its growth coming from the country.

The startup opened an office in San Francisco in early 2020, which it is expanding. Thirty percent of its 65-person team is currently U.S.-based, with some working remotely from other states.

While Workvivo would not reveal hard revenue figures, Goulding only said it’s not seeking additional funding anytime soon considering the company is “in a very strong capital position.”

To tackle the same problem, Microsoft last month launched Viva, its new “employee experience platform,” or, in non-marketing terms, its new take on the intranet sites most large companies tend to offer their employees. With the move, Microsoft is taking on the likes of Facebook’s Workplace platform and Jive in addition to Workvivo.

Despite the increasingly crowded space, Workvivo believes it has an advantage over competitors in that it integrates well with Slack and Zoom.

“We’re sitting alongside Slack and Zoom in the ecosystem,” Goulding said. “There’s Zoom, Slack and us.”

Slack is real-time messaging and what’s happening in the immediate future, and Zoom is real-time video and “about the moment,” he said.

To Goulding, Microsoft’s new offering is unproven yet and a reactionary move.

“It’s obvious there’s a battle to be won for the center of the digital workplace,” he said. “We’re here to capture the heartbeat of an organization, not pulses.”

Snapcommerce raises $85M to make over your mobile shopping experience

People are not only shopping digitally more than ever. They’re also shopping using their mobile phones more than ever.

And for mobile-first companies like Snapcommerce, this is good news.

Snapcommerce, formerly known as SnapTravel, has raised $85 million in what the company is describing as a “Pre-IPO” growth round to help further its mission of “changing the way people shop on their phones.”

The Toronto, Ontario-based startup has built out an AI-driven, vertical-agnostic platform that uses messaging in an effort to personalize the mobile shopping experience and “deliver the best promotional prices.” While it was initially focused on the travel industry, the company is now branching out into other consumer verticals – hence its name change.

Inovia Capital and Lion Capital co-led the new growth round, which included participation from Acrew DCF, Thayer Ventures, Full In Partners as well as existing backers Telstra Ventures and Bee Partners. The financing brings Snapcommerce’s total raised since its 2016 inception to over $100 million. Its last raise — a $7.2 million round from Telstra and NBA star Steph Curry — took place in 2019.

The startup was founded by tech entrepreneurs Hussein Fazal, whose prior company AdParlor grew to $100+ million in revenue, then sold to AdKnowledge back in 2011; and Henry Shi, who previously built uMentioned and worked at Google, where he helped launch YouTube Music Insights, according to previous TechCrunch reporting.

Snapcommerce co-founders Henry Shi and Hussein Fazal, Image courtesy of Snapcommerce

Snapcommerce launched its first, travel-focused product in 2017. It works by using chatbots to interact with customers via messaging apps such as SMS, Facebook and Whatsapp. But the company also has human agents ready to help if people need more assistance, in the past essentially serving as on-demand travel agents.

Its service is not just for hotels and flights, but also to help people book restaurants and activities too.

“Our focus has been on building that personal relationship,” Fazal said. “Many people end up coming back to us when they travel again.” In fact, over 40% of its sales in 2020 came from repeat customers.

Over the years, the company claims to have helped more than 10 million users globally save over $75 million. It expects to cross over $1 billion in total mobile sales this year.

And now it’s ready to branch out into helping consumers save money on goods.

“When shopping, it’s hard to find the right product and even if you do, it’s hard to find a good deal,” he said. “On a desktop, there’s ways around it. But on mobile, it’s virtually impossible.”

The company turned the corner to profitability three months into the pandemic in 2020, seeing a 60% spike in sales in the second half of the year compared to H2 2019, according to CEO Fazal.

It then decided to re-invest its profits to continue growing the business.

“The profitability during the pandemic gave us confidence that we could turn to profitability whenever we needed to and gave us control of our own destiny, which enabled this fundraise,” Fazal told TechCrunch. “The third quarter of 2020 ended up being our greatest quarter ever.”

The COVID-19 pandemic, naturally, only accelerated its growth as more consumers turned to mobile.

“We believe the next wave of power purchasers will be via mobile,” Fazal said. “Some of the new generation don’t even have desktops or laptops, and they spend all their time on their mobile phone and messaging. So we’re able to be at the forefront.” 

Snapcommerce has an IPO in its sights although no specific timeline. The company did not reveal its current valuation or hard revenue figures. The company makes money by either marking up prices provided by a merchant or charging the merchant a commission.

Chris Arsenault, partner at Inovia and Snapcommerce lead investor, said his firm “tripled up” on its investment in the startup after witnessing its success in the travel space.

“Other companies out there only care about the transaction, and force consumers to look through several services to see if they got the best price, all the while telling them ‘there’s only 2 seats left,’ ” he told TechCrunch. “We believe that consumers aren’t going to accept that type of pressure-selling in the future. And Snapcommerce’s ability to build trust with its customers and service providers has attracted us to them as they are defining what the future of commerce is going to be like.”

Ultimately, the company plans to use its fresh capital to continue to scale with the goal of streamlining the entire mobile search, purchase and fulfillment process and make finding “the right item at the right price as sending a message to a trusted friend.”

Income verification is white-hot right now, and Plaid wants in

Fresh off the termination of its planned merger with Visa, Plaid announced Thursday a new income verification product, which it said is aimed at “improving the lending lifecycle” with payroll data.

Dubbed simply Income, the new product — which is currently in beta — is designed to make it easier for people to verify their income in order to do things like secure loans, qualify for mortgages, rent apartments and lease cars, among other things.

Plaid Income gives lenders — both at fintech companies and financial institutions — verified and permissioned data on the income, employment status and tax liabilities of individual users.

The San Francisco-based company says it has been developing its Payroll product suite for more than a year. Last month, Plaid launched its other product in that suite, Deposit Switch, which is designed to allow people to “quickly” switch their direct deposits to a new or existing bank account by linking their payroll account via Plaid.

Notably, Plaid opted to build out its own income verification offering rather than partner with another fintech.

A spokesperson told TechCrunch via email that the company is “always” looking to provide people with the most holistic view of their financial lives. 

“Over the past few years, we’ve added support for several additional different types of consumer-permissioned data, including liabilities, investments, mortgage data and more,” the spokesperson added. “It’s become clearer that payroll data has huge potential value for enabling new or more streamlined services that help people better manage their financial lives, and we knew we wanted to bring that to market ourselves.”

Historically, the process of providing information so that lenders can verify employment status, income and ability to pay can place a heavy burden on applicants.

“They often need to retrieve and then share multiple documents or PDFs, which then a lender must process and review,” Plaid points out. With Income, the process is streamlined, the fintech infrastructure provider claims.

Using Plaid Link, applicants have the choice to share their payroll information using one of two methods:

  • Authenticating using their employer or payroll provider account 
  • Uploading payroll documents including paystubs, W2s and supported types of 1099s 

To provide a more “familiar and secure” experience for applicants, Plaid is developing credential-less authentication capabilities. This means that, say, an applicant for a credit card could supply key identifying information to the lender that Plaid would then use to locate his or her income information. Or maybe another bit of explanation of why this matt Also, an applicant will have the chance to review the information they are sharing and opt out of sharing it at any time.

Image Credits: Plaid

Kate Adamson, product lead at Plaid, said the company views access to payroll data as the next area of opportunity in financial services.

“The past decade of fintech innovation has shown that people can make better financial decisions more easily with better access to and control of their own financial data,” she told TechCrunch.

The income verification space is an increasingly crowded one. Last June, TechCrunch wrote about Pinwheel, an API layer for payroll data that handles everything from income and employee verification to easily switching and managing direct deposit. The company officially came out of stealth last year, announcing that it had raised a $7 million seed round from Josh Kopelman at First Round Capital and Greg Bettinelli at Upfront Ventures.

There’s also Argyle, which is building a “gateway to access employment records.” In October, that startup announced a $20 million Series A funding round led by Bain Capital Ventures. Ironically, Argyle’s name was inspired by Plaid, according to Argyle CEO and co-founder Shmulik Fishman. At the time, he told me that the company intentionally named Argyle after a pattern.

“I’m a huge fan of Plaid, and make no secret about it,” Fishman had said. “Plus, there’s a number of other successful companies such as Stripe and Checkr named after patterns. We went through a list of patterns and polka dots didn’t sound very good. So we settled on Argyle. And ultimately, we want to be the Plaid for employment records.”


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After 200% ARR growth in 2020, CourseKey raises $9M to digitize trade schools

When the COVID-19 pandemic hit and forced educational institutions to go virtual, many were scrambling to develop online or blended curriculums.

That struggle was particularly challenging for trade schools, many of which were not designed to teach online and were mostly paper-driven. 

CourseKey, a San Diego-based trade school management SaaS startup, was in a unique position. Demand surged and its ARR grew by 200% in 2020. And now, the company has raised $9 million in a Series B led by SignalFire and with participation from existing backer Builders VC to help it continue its momentum. 

Founded in 2015 by Luke Sophinos and Faddee Kannah, CourseKey’s B2B platform is designed to help organizations that teach some of our most essential workers — from automotive mechanics to electricians to plumbers to nurses, phlebotomists and dental assistants.

CourseKey founders Luke Sophinos (left) and Faddee Kannah (right)

CourseKey founders Luke Sophinos (left) and Faddee Kannah (right)

The goal is to help those organizations boost revenue by improving student retention and graduation rates, helping them maintain regulatory compliance and generally streamline processes. 

“Things really took off last year when the coronavirus hit,” Sophinos said. “So many schools had to adopt a digital arsenal. We saw a massive acceleration trend that was already going to happen. Every industry had been eaten. We just found a space that wasn’t yet.”

CourseKey currently works with over 200 career colleges, including the Paul Mitchell School and the Institute for Business & Technology, among others. Over 100,000 students use its software.

For Sophinos and Kannah, founding CourseKey was more than just a business opportunity. Kannah, who had fled Iraq as a refugee, saw family members going through trade schools that were lacking technology infrastructure and modern software tools. He architected the CourseKey platform. 

Sophinos, frustrated by his own college experience, applied for The Thiel Fellowship – a program that supports students in company building instead of university attending. However, he recognized that not everyone who doesn’t want to go to traditional college has that option.

“While looking at alternatives, our early team began recognizing a market that we felt no one was paying attention to. It was occupied by our friends and by our family members,” Sophinos said. “It was a space that, for some odd reason, was largely being left out of the education conversation.”

In 2017, CourseKey partnered with a large vocational education provider to build and launch what Sophinos describes as “the world’s first trade school management system.”

“We focused on automating daily classroom procedures like attendance and grading, enhancing the student experience through communication tools, helping to identify at-risk students, and simplifying compliance,” he said. “We also visualized data for retention purposes.”

CourseKey also does things like track skill attainment, run evaluations and exams and integrate third-party tools.

Image Credits: CourseKey

The startup’s goal with its new capital is to scale the platform to serve “every trade school in the country” with the mission of changing the narrative that four-year college is the “only option.” It also plans to add new features and capabilities, largely based on customer requests. CourseKey also plans to nearly double its current headcount of just over 50 employees to nearly 100 over the next two years.

“This is a massive market and massive business opportunity,” Sophinos said.

CourseKey has an impressive list of supporters beyond SignalFire and Builders. Steve Altman, former vice chairman and president of Qualcomm, led its $3.5 million seed round which also included participation from Larry Rosenberger, former FICO CEO. Dennis Yang, former CEO of edtech giant Udemy, and Altman now serve on its board.

SignalFire Managing Director Wayne Hu, who also took a seat on the startup’s board with the new round, said his firm recognized that vocational schools and their administrators, instructors, and students “suffer from a lack of purpose-built software.”

“Student Information Systems and Learning Management Systems are optimized for traditional K-12 schools and university workflow, but vocational schools are stuck relying on pen and paper or trying to shoe-horn in solutions that aren’t built for them,” Hu wrote in a blog post.

CourseKey, in SignalFire’s view, is reimagining a new education operating system built specifically for experiential, hands-on learning models, which continues to evolve with hybrid/distance learning.  

Hu also pointed out that since many of the jobs that vocational schools are preparing people for “have life or death consequences” and as such, are highly regulated.

“Not only does CourseKey improve trade school business KPIs, it serves as insurance against this existential risk,” he added.

Proptech startup States Title, now Doma, going public via SPAC in $3B deal

Real estate tech startup Doma, formerly known as States Title, announced Tuesday it will go public through a merger with SPAC Capitol Investment Corp. V in a deal valued at $3 billion, including debt.

SPACs, often called blank-check companies, are increasingly common. They exist as publicly traded entities in search of a private company to combine with, taking the private entity public without the hassle of an IPO.

When it floats later this year, Doma will trade on the New York Stock Exchange under the ticker symbol DOMA. The transaction is expected to provide up to $645 million in cash proceeds, including a fully committed PIPE of $300 million and up to $345 million of cash held in the trust account of Capitol Investment Corp. V. 

CEO Max Simkoff founded San Francisco-based Doma in September 2016 with the aim of creating a technology-driven solution for “closing mortgages instantly.” While it initially was founded to instantly underwrite title insurance, the company has expanded that same approach to handle “every aspect” of closing and escrow.

Doma has developed patented machine learning technology that it says reduces title processing time from five days to “as little as one minute” and cuts down the entire mortgage closing process “from a 50+ day ordeal to less than a week.” The startup has facilitated over 800,000 real estate closings for lenders such as Chase, Homepoint, Sierra Pacific Mortgage and others.

The name change is designed to more accurately reflect its intention to expand “well beyond” title into areas such as appraisals and home warranties.

Its goal with going public is to be able to “continue to invest in growth, market expansion and new products.”

Anchoring the PIPE include funds and accounts managed by BlackRock, Fidelity Management & Research Company LLC, SB Management (a subsidiary of SoftBank Group), Gores, Hedosophia, and Wells Capital. Existing Doma shareholder Lennar has also committed to the PIPE and Spencer Rascoff, co-founder and former CEO of Zillow Group, has committed a personal investment to the PIPE.

Up to approximately $510 million of cash proceeds are expected to be retained by Doma, and existing Doma shareholders will own no less than approximately 80 percent of the equity of the new combined company, subject to redemptions by the public stockholders of Capitol and payment of transaction expenses.

In mid-February, Doma announced it had closed on $150 million in debt financing from HSCM Bermuda, which had previously invested in the company. And last May, it announced a massive $123 million Series C round of funding at a valuation of $623 million.

Doma joins the growing number of proptech companies going the public route. On Monday, Compass, the real-estate brokerage startup backed by roughly $1.6 billion in venture funding, filed its S-1

In 2020, Social Capital Hedosophia II, the blank-check company associated with investor Chamath Palihapitiya, announced that it would merge with Opendoor, taking the private real estate startup public in the process.

Porch.com also went public in a SPAC deal in December. And, SoftBank-backed View, a Silicon Valley-based smart window company, will complete a recent SPAC merger to be publicly listed on the NASDAQ stock exchange on March 8. The company is expected to debut trading with a market value of $1.6 billion.

Compass files S-1, reveals $3.7B in revenue on net loss of $270M

Compass, the real-estate brokerage startup backed by roughly $1.6 billion in venture funding, filed its S-1 Monday.

The move comes just under one year after the New York-based company laid off 15% of its staff as a result of the shifting economic fortunes created by the global response to the novel coronavirus pandemic.

Prior to the IPO, SoftBank’s Vision Fund holds slightly more than a one-third stake in the company. Other investors include the Canadian Pension Plan Investment Board, Fidelity, Wellington Management, and the Qatar Investment Authority, according to Crunchbase.

The company’s last fundraise was in July 2019, when Compass — a company that has built a three-sided marketplace for the real estate industry, along with a wide set of algorithms to help make it work — raised a $370 million round of funding. That financing valued Compass at $6.4 billion.

One of the greatest things about companies going public is that we get insight into their financials. Compass is not profitable but it did see a massive surge in revenue over the past few years.

The company’s revenues have increased from $186.8 million in 2016 to a whopping $3.7 billion last year, with much of the top-line revenue growth coming in the last two years, according to its S-1. Given the startup’s agency model, most of that revenue is paid out directly to the firm’s agents, who netted about $3 billion in commissions in 2020. Compass posted a net loss of $270 million in 2020, a net loss roughly in line with what it has experienced in the past two years.

Total transactions on the platform grew from about 27,000 in 2018 to 145,000 in 2020, while total transaction volume (the value of the properties the company brokers) went up by about five-fold, from $34 billion to $152 billion last year. Since commissions on real estate are determined as fixed percentage of the value of the property, more transaction volume directly translates into more revenue for Compass. The company has been able to sustain that growth while limiting the number of agents it has added. From 2019 to 2020, the company only had 28% growth in its total number of agents, reaching just shy of 9,000 last year.

Compass had its share of trouble before the pandemic. In September 2019, the Wall Street Journal reported that the company had lost a number of senior level individuals over the previous eighteen months including its chief financial officer, chief marketing officer and chief technology officer.

Square’s bank arm launches as fintech aims ‘to operate more nimbly’

Known for its innovations in the payments sector, Square is now officially a bank.

Nearly one year after receiving conditional approval, Square said Monday afternoon that its industrial bank, Square Financial Services, has begun operationsSquare Financial Services completed the charter approval process with the FDIC and Utah Department of Financial Institutions, meaning its ready for business.

The bank, which is headquartered in Salt Lake City, Utah, will offer business loan and deposit products, starting with underwriting, and originating business loans for Square Capital’s existing lending product.

Historically, Square has been known for its card reader and point-of-sale payment system, used largely by small businesses – but it has also begun facilitating credit for the entrepreneurs and smalls businesses who use its products in recent years.

Moving forward, Square said its bank will be the “primary provider of financing for Square sellers across the U.S.”

In a statement, Square CFO and executive chairman for Square Financial Services, Amrita Ahuja said that bringing banking capability in house will allow the fintech to “operate more nimbly.”

Square Financial Services will continue to sell loans to third-party investors and limit balance sheet exposure. The company said it does not expect the bank to have a material impact on its consolidated balance sheet, total net revenue, gross profit, or adjusted EBITDA in 2021.

Opening the bank “deepens Square’s unique ability to expand access to loans and banking tools to underserved populations,” the company said.

Lewis Goodwin had been tapped to serve as the bank’s CEO, and Brandon Soto its CFO. With today’s announcement, Square also announced the following new appointments:

  • Sharad Bhasker, Chief Risk Officer
  • Samantha Ku, Chief Operating Officer
  • Homam Maalouf, Chief Credit Officer
  • David Grodsky, Chief Compliance Officer
  • Jessica Jiang, Capital Markets and Investor Relations Lead

The trend of fintechs becoming bank continues. In February, TechCrunch reported on the fact that Brex had applied for a bank charter.

The fast-growing company, which sells a credit card tailored for startups with Emigrant Bank currently acting as the issuer, said that it had submitted an application with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI) to establish Brex Bank.

A number of fintech companies, or those with fintech services, have spun up products typically offered by banks, including deposit and chequings accounts as well as credit offerings. Often, these are designed to provide capital to customers who might not be able to get funding on favorable terms from traditional banking institutions, but who might qualify for business-building loans from a provider who knows their company, like Square, inside and out.

Chicago Ventures raises $63M to back seed-stage startups located anywhere but Silicon Valley

Buzzy mega-rounds and high-profile IPOs often dominate headlines. But many of those companies were once early-stage and scrapping to raise a seed round.

Today, Chicago Ventures, a VC firm that often leads seed-stage rounds, announced the close of its third fund — a $63 million vehicle that it’s already put to work.

Chicago Ventures (which is based in Chicago, where else?) has a very specific set of criteria when it looks to back companies. For one, as mentioned, it not only wants to back seed-stage startups, it usually leads those rounds. The firm is targeting 25 investments out of its new fund with an average check size of $1.5 million to $2 million.

As evidence, it has so far backed 11 companies out of this third fund, leading 10 of those rounds. The startups include CognitOps, CoPilot, Forager, Interior Define, NOCD, OneRail, PreFix and Ureeka.

The firm also is focused on investing in companies located out of the traditional hotspots of Silicon Valley and New York. Six of its most recent investments were in Chicago-based startups, two in Austin (where it recently opened an office), one in Orlando, Florida, and one in Los Angeles.

Chicago Ventures prides itself in identifying, and backing, “overlooked” companies. It was founded in 2012 under the premise that enduring companies could be built “anywhere” and not restricted to “a few select area codes.”

“Only a handful of funds consistently lead seed rounds. Tag-along, momentum-based investing is the norm,” the firm said in a statement. “The industry’s attention still converges on industries and geographies with rich histories of innovation. We fill these gaps. We lead seed rounds before it’s obvious, and serve as active, operationally-involved partners during a company’s earliest days. We invest off the coasts.”

Since its inception, the firm’s portfolio companies have raised more than $1.5 billion in follow-on capital. Seventeen of those companies are now valued over $100 million, including Cameo, business software marketplace G2 and logistics software company project44.

Chicago Ventures closed its second fund in 2016 — which included a $60 million main fund and a $6 million sidecar fund. The firm opted not to go the sidecar route this time around. 

In conjunction with the new fund, Chicago Ventures also announced that it has promoted Peter Christman and Lindsay Knight to partner. Christman leads investments in companies rebuilding old-line enterprise workflows and consumer products expanding access to care and financial well-being. Knight leads the firm’s post-investment operations, including talent, business development and functional best practice sharing.

Chicago Ventures has also named Jackie DiMonte to the team as a new partner. DiMonte comes from Hyde Park Venture Partners, where she led early-stage, enterprise investments. An engineer by training, DiMonte is based in Austin, where Chicago Ventures has made 10 investments since 2015.

In 2020, the dollars invested into seed-stage startups in the United States had an up-and-down year that TechCrunch explored in this piece. Also, the pattern of rising seed-check sizes seen in prior years continued, despite the tumultuous business climate.

First Boulevard raises $5M for its digital bank aimed at Black America

The murder of George Floyd last May ignited many things in the United States last year — one of which that was perhaps unexpected: a rise in the number of digital banks targeting the Black community.

Some members of the Black community took their belief that big banks are not meeting their needs and turned them into startup concepts.

One of those startups, First Boulevard (formerly called Tenth), has just raised $5 million in seed funding from Barclays, Anthemis and a group of angel investors such as actress Gabrielle Union, Union Square Ventures John Buttrick and AutoZone CFO Jamere Jackson.

For co-founder and CEO Donald Hawkins, the genesis for the Overland, Kansas-bank came after Floyd’s murder, when he and friend Asya Bradley were talking about what they felt Black America “really needed to get out of a vicious cycle” of dealing with the same issues with no real solutions in sight.

CEO Donald Hawkins

COO Asya Bradley

“After viewing yet another tragedy engulf the Black community, and the all-too-familiar protests against persisting issues,” Hawkins said. “it was beyond clear to me that the solutions Black America needs must be financially-focused and developed within our community.”

The pair both had fintech experience. Hawkins had founded Griffin Technologies, a company focused on providing real-time, contextual intelligence to community banks and credit unions. And Bradley most recently was a founding team member and head of revenue at Synapse, a platform that built banking-as-a-service APIs to help bank the unbanked of America by connecting fintech platforms to banking institutions.

They discovered that there were only about 19 Black banks in the U.S., collectively holding about $5 billion in assets.

“And their technology was really behind the times,” Hawkins said. “We also took a hard look at some of the existing digital banks to really see who was really going about it  in the same way that we felt like America needed, and it was pretty clear at that point, that no one was really attacking the issue of helping Black America build some level of financial stability through the form of wealth-building play.”

The pair formed First Boulevard last August under the premise that Black Americans are “massively underserved consumers” of financial products and services despite having a collective spending power of $1.4 trillion annually. The startup’s mission is to empower Black Americans “ to take control of their finances, build wealth and reinvest in the Black economy” via a digitally-native platform. First Boulevard has 100,000 people on its waitlist currently.

Part of its goal with the new capital involves building out a Black business marketplace, which will give its members Cash Back for Buying Black™. It also plans to use the money to expand its team, increase its customer base and grow its platform to offer fee-free debit cards, financial education and on developing technology to help members automate their saving and wealth building goals.

History has proven that oppressed communities can succeed when their finances are centralized, and when it comes to financial services for the Black community, a centralizing force is long overdue,” Hawkins said.

The bank’s Cash Back for Buying Black™ program helps members earn up to 15% cashback when they spend money at black-owned businesses. 

“I believe the most recent stat but that also was that 41% of black owned businesses have closed since COVID-19 started,” Hawkins said. “We want to support them as much as we can.”

First Boulevard also is focused on passively building wealth for its communities.

“Black America as a whole has been blocked from learning how money works. We want to connect our members to wealth-building assets such as micro investments like money market accounts, high yield savings and cryptocurrency — things that Black America has largely been blocked from,” Hawkins said.

Bradley, who serves as First Boulevard’s COO, believes the current financial industry was not built to serve the needs of melanated people. Its goal is to take their understanding of the unique needs of the Black community to provide things such as early access to wages, round up savings features, targeted financial education and budgeting tools.

The pair aims to have a “fully inclusive” team that represents the community it’s trying to serve. Currently, its 20-person staff is 60% black, and 85% BIPOC. Two-thirds of its leadership team are women and 100% is BIPOC. The company plans to boost its headcount to 50 by year’s end.

“We are very proud of that considering that in the fintech space, those are not normal numbers from a leadership perspective,” Bradley said.

For Katie Palencsar, an investor at the Female Innovators Lab by Barclays and Anthemis, said that her firm has always recognized “that access to financial services has long remained a challenge despite the digital evolution.”

“This is especially true for Black Americans who often reside in financial deserts and struggle to find platforms that truly look to serve them,” she said. “First Boulevard deeply understands the challenge.”

Palencsar believes that First Boulevard’s mission of helping Black Americans not just bank, but actually build wealth, is unique in the market.

First Boulevard sees the wealth gap that continues to grow within the U.S. and wants to build a digital banking platform that addresses the systemic and structural challenges that face this population while enabling Black Americans and allies to invest in the community,” she said.

The company also recently announced a partnership with Visa, under which First Boulevard will be first to pilot Visa’s new suite of crypto APIs. First Boulevard will also launch a First Boulevard Visa Debit card.

First Boulevard is one of several digital banks geared toward Black Americans that have emerged in recent months. Paybby, a digital bank for the black and brown communities, recently acquired Wicket, a neobank that uses AI and biometric technology to create a personalized experience for users. Hassan Miah, the CEO and founder of Paybby, said the bank’s goal is to be “the leading smart, digital bank for the Black and Brown communities.”

Paybby, which started by offering a bank account and a way to expedite PPP loans, will soon be adding a cryptocurrency savings account for the Black and Brown communities.   

“Black buying power is projected to grow to $1.8 trillion by 2024,” Miah said. “Brown buying power is over $2 trillion. Paybby wants to take a good portion of this multi-trillion dollar market and give it back to these communities.”

Last October, Greenwood raised $3 million in seed funding from private investors to build what it describes as “the first digital banking platform for Black and Latinx people and business owners.”

At the time, co-founder Ryan Glover, founder of Bounce TV network, said it was “no secret that traditional banks have failed the Black and Latinx community.”