Exclusive: Black America-focused fintech Kinly raises $15 million
Kinly, a neobanking startup focused on on underbanked Black potential customers, officially launched Monday and announced $15 million in Series A funding, the company tells Axios exclusively.
Why it matters: Kinly is among a rising class of neobanks that believe they can better meet their customers' needs by focusing on a tighter demographic than the last generation of challenger bank, which sought to serve broader markets.
In particular, the company has built out an early niche among Black millennial women, with 70% of its 22,000 beta users and over 300,000 on its waitlist coming from that demographic.
Details: The Series A raise, which values the business at $65 million, was led by Forerunner Ventures, with participation from Point 72, Anthemis Group, Kapor Capital, actress Gabrielle Union, basketball star Kevin Durant and former professional football player Marshawn Lynch.
- The company previously raised some $5 million, launching into beta last year.
- Kinly offers overdraft protection, paycheck advances, and no monthly fees, and plans to offer crypt0 and stock trading capabilities later this year.
Context: "The next chapter and opportunity for investors and entrepreneurs will be winners by demographic and not necessarily by product," Index Ventures partner Mark Goldberg told Axios in May. Other investors appear to share his sentiment.
- Greenwood, focused on the underbanked with a specific interest in the Black and Latino community, raised $40 million last year.
- Cheese raised $3.6 million for its digital bank aimed at the Asian-American community. Last summer Daylight raised millions for its LGBTQ consumer base.
Background: Spurred into action after the murder of George Floyd, Donald Hawkins founded the Atlanta, Georgia-based company in 2020 with the goal of helping close the wealth gap between Black and White Americans.
- "We believe that if Black women win, the entire community wins. She's the one that's teaching her children, nieces and nephews, brothers and sisters," Hawkins says. "If we really hit the way we'd like to with Black millennial women, we could potentially stop the next generation of Black America joining the same path as so many of us have gone through."
- Younger married women are increasingly making the financial decisions in the family, according to a recent study from Merrill Lynch Wealth Management.
How it makes money: Kinly's revenue currently relies largely on interchange fees, though it also gets paid by referring its customers to other financial products.
- High-customer acquisition costs have been one of the biggest issues for the last generation neobanks. Hawkins says that Kinly, however, has been able to keep its costs low (to under $20 a head) because its community shares heavily online.