citi ventures

Daylight, the LGBTQ+ neobank, raises cash to launch subscription plan for family planning • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in Anthemis Group, Apps, Bank, citi ventures, daylight, Fintech, funding, Gaingels, Kapor Capital, lgbtq, neobank, queer, startup, StartupsNo Comments

A day after a bill that would codify same-sex marriage in the U.S. cleared a key hurdle in the Senate, Daylight, a digital bank that pitches itself as LGBTQIA+-friendly, closed a $15 million Series A round led by Anthemis Group with participation from CMFG Ventures, Kapor Capital, Citi Ventures and Gaingels. Daylight Co-founder and CEO Rob Curtis says that the new capital will be used to, in his words, “build the financial products and services to help queer people live their best lives” — starting with a subscription plan called Daylight Grow designed to help prospective queer families with financial planning. “There are over 30 million LGBTQ+ Americans with a spending power of around $1 trillion and yet the community lacks access to the suite of products and services they need to live their best lives,” Curtis told ZebethMedia in an email interview. “Daylight was created with a single mission: to build the financial products and services to help queer people live their best lives.” Curtis co-launched Daylight with Billie Simmons, a trans woman, and Paul Barnes-Hoggett in early 2020. Prior to starting Daylight, Curtis worked for several organizations supporting the LGBTQ+ lifestyle and causes, including Gaydar, a dating site for gay and bisexual men. He also co-founded Squad Social and Helsa Helps, startups aiming to improve access to mental health for members in the LGBTQ+ community. Daylight is a part of wave of recent neobanks — bank-like fintech companies that operate online, without physical branch networks — organized around aspirational causes and missions. Rapper Killer Mike’s Greenwood aims to help Black and Latinx communities build generational wealth. Majority, which launched the same year as Greenwood (2020), seeks to build banking tools and resources for immigrants. Purpose Banking, Aspiration and One all promise to never let deposits fund fossil fuels. Image Credits: Daylight With the wealth of ethics-forward fintechs out there, why found a neobank for LGBTQ+ people? According to Curtis, most mainstream banking products simply weren’t designed with U.S.-based queer folks in mind. (Pride Bank, a neobank with similarly queer-forward branding, is based in Brazil.) For example, Daylight provides debit cards with customers’ chosen names, which aren’t always the same as what’s on their ID. It offers members 10% cash back every time they spend with a queer and allied business that Daylight has partnered with. And it offers guided goals for gender-affirming procedures like top surgery and facial feminization. Beyond cash management features like a checking account, free ATMs and the ability for members to get paid two days early, Daylight hosts communities where customers can ask questions around “queer financial literacy,” such as family planning, in what Curtis claims is a safe and supportive environment. “At Daylight, our mission has always been to break down the financial barriers that hold LGBTQ+ people back … In this post-Dobbs world, Daylight’s commitment to supporting queer families has never been more necessary,” Curtis said, referring to the Supreme Court case that legalized abortion bans in the U.S. and opened the door to legal challenges of marriage equality. Certainly, members of the LGBTQ+ community face fiscal challenges that many cisgender, straight adults never do. Some suffer the consequences of being kicked out of their homes by unaccepting parents. Others find themselves on the hook for HIV/AIDS treatment, hormone therapy and fertility procedures. Most queer people gravitate toward pricey metro areas because they’re more accepting and progressive, and many queer people lack a safety net — whether because they lack family support or don’t have children who can take care of them. For those reasons and others, LGBTQ+ people frequently earn less, live in poverty and have less in pension savings than their cisgender counterparts. The situation for transgender people is particularly dire, with the poverty rate for the transgender community in the U.S. averaging around 30% — close to double the rate of cisgender adults — according to a 2019 study from the UCLA School of Law’s Williams Institute. Transgender people are also twice as likely to be unemployed and four times as likely to have a household income below $10,000; the 2021 U.S. federal poverty was $12,880. The aforementioned Daylight Grow isn’t a cure-all, but targets the major hurdles many queer couples encounter in starting a family. This is a significant portion of Daylight’s customers. A recent poll by the Family Equality Council found that nearly two-thirds of LGBTQ millennials — 63% — are considering becoming parents for the first time or expanding their family. Image Credits: Daylight When the product launches in early 2023, Simmons says that Daylight Grow will offer a personalized “family creation plan” covering financial, legal and logistical milestones tailored to individual states and needs, “family planning concierges” to provide financial advice and logistical support, a “family-building marketplace” with vetted family attorney networks and recommendations for IVF and surrogacy clinics, and in-person financial and fertility education events. “Family creation is a major life event for queer people and the challenges we face are increasingly more complex than those for non-LGBTQ people,” Simmons told ZebethMedia via email. “The launch of Daylight Grow will help queer people navigate through the complex legal and financial challenges involved with starting a family, making it faster and easier to start a family, and unlocking critical intergenerational wealth for our community.” Daylight Grow will also offer access to family-building loans, a potential game-changer for queer customers who’ve dealt with discrimination from traditional banks. According to a 2019 study, same-sex borrowers were 73% more likely to be denied a mortgage or be approved for a mortgage at a higher-than-average interest rate. Daylight plans to offer hundreds of free Grow subscriptions to low-income, marginalized families in states where LGBTQ+ rights are under significant legal attack, Curtis said. Which states — and Grow’s pricing — are still being decided. Daylight has raised $20 million in capital to date. Curtis wouldn’t answer questions about revenue and hiring plans, preferring, at least for now, to keep the focus on the company’s core mission.

Citi backs Indian SaaS startup Lentra as it plans to expand internationally • ZebethMedia

By zebethcontrolPosted on November 14, 2022Posted in citi ventures, Fintech, india, SaaS, StartupsNo Comments

India initially made its name in the tech world years ago when it staked out reputation as a key hub for business process outsourcing. Now that legacy has taken a very different turn in fintech with outsourcing of a very different kind, with the emergence of embedded finance technology. In the latest development, Lentra, an Indian embedded AI-based finance startup, has raised $60 million — a Series B that values the startup at “over $400 million,” D Venkatesh, the founder and CEO of the startup, told ZebethMedia in an interview. Existing investors Bessemer Venture Partners and Susquehanna International Group (SIG) led the round with strategic participation also from Citi Ventures, a subsidiary of the New York-based investment banking giant Citigroup. This is Citi Ventures’ first investment in a fintech out of India, and that and this round overall underscores how far the fintech and embedded finance ecosystem have come along in recent years. Lentra, which is profitable, has been growing at a very fast clip. In 2019, its first year of operations, it registered $1 million from its “annual consumption rate” — this term relates to the amount of revenue Lentra makes based on usage of its APIs. As of this year, that figure is up to $10 million, and it is projected to hit $100 million in 2024. The Mumbai-based startup works with commercial banks to power their digital loan services. HDFC Bank, Federal Bank, Standard Chartered and IDFC First Bank are some of its key customers. Overall, Lentra has more than 50 clients and has processed over 13 billion transactions and $21 billion worth of loans since its launch. Venkatesh said the startup achieved all this growth without hiring a single sales executive until April this year. The company’s mission is not unlike that of a number of other fintechs that have thrown their hats into the ring to work with — rather than completely upend and disrupt — legacy financial services providers, which have found themselves unable to keep up with innovation from faster moving, tech based competitors. “We want to help and empower the banks, who are our clients, to lend better, lend completely on a digital platform and improve on all parameters,” said Venkatesh. Those parameters are the same for banks the world over. Yes, banks want to lend more, and to be more accessible to more potential borrowers — hence moving to digital platforms to help them scale and compete better against digital-first offerings. But banks have had their feet burned many a time already: they don’t want to take on a load of bad debt in the process of scaling, so they need better tech to improve how they vet borrowers, and also to have a better grip on forecasting what they might expect to get in returns (and losses) as a result. The four-year-old fintech helps them do this through a variety of loan tools. Lentra Lending Cloud, which gives ready-to-use third-party API connectors to various data sources, as well as a Loan Management System (LMS) and a no-code Business rules engine (BREx) with modules for clients to use out-of-the-box. The startup also has a platform called GoNoGo in its catalog that helps banks ascertain whether a loan should be given to a customer once they get their application. Venkatesh said that in India, 90% of lending frauds occur by way of ID proof thefts, where bad actors impersonate someone with a better credit record to get a loan quickly. Lentra uses AI to triangulate data to identify potential fraud attempts. “If you solve ID theft fraud, you minimize the approach or the stance that the bank will have towards a non-performing asset or bad loan,” the founder said. He claimed while banks had only been able to whittle down the loan process — applying, processing and approving or denying applications — to between six and seven days, Lentra’s technology has reduced that turnaround to a few seconds. Even though a number of startups are trying to ease lending for banks, interestingly Lentra sees Salesforce as one of its biggest competitors when it comes to loan origination. “Our number one target is anyone who’s using Salesforce for loan origination. We go, latch on to them, and then we convert them,” Venkatesh said. Citi is not just interested in tapping more into India’s tech ecosystem, but to leverage it for its own global growth, too. “Lentra is our first fintech investment in India, and we are very excited about the team’s ability to develop and scale low-friction software solutions for lenders,” said Everett Leonidas, Director & APAC Lead Investor for Citi Ventures, in a statement. “As a global bank, we look forward to Lentra scaling their products and platform internationally.” Venkatesh told ZebethMedia that Lentra plans to utilize the funding to continue updating its platform, add new features and make it more robust and faster. The startup is also set to expand beyond India and establish its business outside the country, starting with three economies in Asia: Indonesia, the Philippines and Vietnam. Post the initial expansion, the startup plans to go beyond Asia and enter the U.S. Offices in the three new Asian countries will become operational starting as early as January, the founder said. Lentra already has its presence in Singapore since it acquired an AI startup TheDataTeam in June this year that had an office in the Lion City. Venkatesh said that the office in Singapore would become the vehicle for the startup to go into the ASEAN economies. Alongside improving the offering and expanding the business, Lentra has plans to acquire complementary businesses. The founder told ZebethMedia that its acquisition plans focus on three areas — robotic process automation, payment systems or solutions that are not regulated entities and teams working on statistical modeling or building heuristics model within statistics. “Lentra is empowering lenders to fuel the dreams of millions with effective financial inclusion and credit decisioning,” said Vishal Gupta, Partner at Bessemer Venture Partners. “We were really impressed with