Over the past year, there has been a surge of newly worked digital banks aimed at specific demographics. The banks in nearly all cases are trying to meet the needs of unrepealable populations that they believe are feeling left out or underserved by traditional financial institutions.
The latest such neobank to sally is New York-based Daylight, which describes itself as the first LGBTQ digital financial platform in the United States. (There is a digital wall in Brazil with a similar mission tabbed Pride Bank).
Founded by LGBTQ entrepreneurs Rob Curtis (CEO), Billie Simmons, a trans woman (COO) and Paul Barnes Hoggett (CTO), Daylight is announcing today that it has secured $5 million in a seed funding round. Kapor Wanted and Precursor Wanted co-led the round, which included participation from Anthemis Group, Clocktower, Financial Venture Studio and Citibank.
Daylight says its mission is to “build a increasingly equitable financial life for LGBTQ folks and their chosen families.” The company’s services are targeted toward LGBTQ people, their families, and allies — or as Dayilght describes it, “values-based consumers who want to support the queer community.”
The startup, which was founded in 2020, plans to use its new wanted mostly to expand its flagship product and lifestyle services, which are designed to modernize financial equality and inclusion for the unscientific 30-million-plus Americans who identify as LGBTQ . It moreover plans to build out a LGBTQ merchantry marketplace and a platform that offers discounts and rewards when members shop at merchants whose deportment support the queer community.
In an interview with TechCrunch Curtis explained why he believes Daylight is uniquely positioned to help the population deal with challenges such as higher debt unifying to factors such as pre-existing conditions, lower insurance levels, HIV management needs and [gender] transition costs. At the same time, many members of the polity moreover have lower income levels due to “continued workplace discrimination.”
“LGBT people engage with money really differently and there’s a multitude of reasons for that,” Curtis said. “We spend well-nigh the same proportion of our income on discretionary spend, but we’re well-nigh 20% less likely to have a savings account, 20% less likely to own investments like stocks, or a quarter less likely to own a bilateral fund. And we estimate that only well-nigh 30% of our polity has any manor planning in place.”
Also, life in unstipulated tends to be increasingly plush for LGBTQ persons, Curtis believes.
“It is expensive to be a queer person,” he said. “Not only do we find that when we come out to our parents, 40% of us no longer have financial support for things like higher and those transitions from diaper into adulthood. We end up with 50% increasingly higher debt. We moreover have increased sexual health financing and some have gender affirming surgery that they need to pay for.”
“By the time we get to our 30s, we will be told ‘you can have one of the pursuit three things: gender affirming surgery, a home petrifaction or a child,’ ” Curtis added. And, on top of that, having a child is often increasingly expensive for this population considering people either have to prefer or rent a surrogate.
Kapor Wanted Partner Brian Dixon believes that the fact that Daylight’s founders have personally experienced problems within the traditional financial industry gives them the necessary insight to help others in the LGBTQ community.
One of those problems include friction associated with names on issued cards, which leads to customers stuff outed as trans. The population moreover faces a lack of unobjectionable financing products, Dixon believes, for things such as surrogacy, IVF, adoption, transition support and mental health.
“Many neobanks do not provide a truly unique financial wits that will result in a mass exodus from traditional banks,” Dixon said. “Daylight has an opportunity to be the outlier, expressly given their focus on community. Daylight’s unique features include a seamless vellum issuance process that allows trans and non-binary customers to order a vellum in their preferred name, typesetting sessions with expert LGBTQ financial coaches, get peer-to-peer translating from their digital polity and earn rewards that are meaningful to the LGBT community.”
Daylight will offer features such as a checking account, the worthiness for members to get paid two days early, self-ruling ATMs and “no subconscious fees,” equal to Curtis.
“I think that payday early is really important considering we know that there are upper rates of credit vellum declines for folks who are ownership hormones,” he said.
Another full-length the Daylight platform offers is personalized recommendations to members which zestful them when they’re spending money with merchants that support anti-LGBTQ politicians and initiatives, a practice known as “rainbow washing.” It will moreover offer volitional merchants that it says are “more aligned with the community’s values.”
“LGBTQ consumers, and those that support them, are very intentional well-nigh where they spend, but it’s difficult for an individual to know whether they’re spending in line with their values, or inadvertently shopping with brands that engages in rainbow washing while funding politicians and projects that work versus our interests,” Curtis said.
Daylight is currently in beta but once has “thousands and thousands” of customers on its wait list, said Curtis, who estimates that it will have 10,000 customers by the time it launches in October.
Other digital banks targeting specific demographics that have raised funding over the past year include Fair, a multilingual digital wall and financial services platform that recently launched to the public without raising $20 million in 40 days older this year. Others that have emerged include Greenwood, First Boulevard and Cheese.