Fintech
How Majority’s focus on immigrants has doubled users and is on track to reach $2 billion in deposits in a year
In recent years, numerous neobanks and fintechs have emerged focused on niche consumer segments such as students, doctors and immigrants. The business idea is simple: traditional financial intermediaries have left these consumer segments underserved, and fintechs can step in to fill the gap.
But growing these fintechs is difficult: for one thing, the The fintech winter hit hard last year AND funding halved which was available to aspiring fintech brands. Second, when it comes to niche segments of the banking industry, it is easier for incumbents to expand and compete (if they want to) than for a new player to deepen their roots and remain standing despite headwinds.
But some fintechs are emerging from the crisis stronger and better. For example, Majoritya fintech focused on banking immigrants in the United States, recently announced that it has secured $20 million in funding after doubling its user growth and is on track to reach $2 billion at the end of the year.
With the odds stacked against the company, how has Majority managed to grow?
Put people in the product
The founders of Majority have personally experienced what it means to immigrate and start life over on different shores. Immigrants quickly learn that there is a maze they must navigate when they land in a new country, and Magnus Larsson, CEO and co-founder of Majority, recounted his experiences such as difficulty downloading the right local apps, calling home without paying exorbitant fees and opening bank accounts to build fintech.
The majority allows immigrants to open a bank account and get a debit card, community discounts, low-cost international money transfers and discounted international calls without needing a Social Security number for a membership fee of $5.99 a month .
Magnus Larsson, CEO and co-founder of Majority
Choose the right people and place
In building the fintech, Larsson consciously focused on bringing employees who already had experience in different product areas into the fintech space. The company also conducted consumer research: “We spent a lot of time meeting with different immigrant communities around the world, especially here in the United States. Our company is built by immigrants for immigrants. We started in Stockholm, but we strategically chose Miami as our headquarters here in the United States, as it is the city with the largest number of foreign citizens, which gives us the opportunity to be within the communities we serve,” he Larsson said.
Grow consciously
As part of its growth strategy, Majority has focused on launching consciously rather than at scale. The company brings its products to migrant consumers through a “diaspora by diaspora” strategy rather than “rushing to grow fast,” Larsson says. Most also run different marketing campaigns depending on the community they’re targeting, meaning the company’s outreach and engagement efforts look different when targeting Colombian immigrants versus Mexican ones.
The company actively engages communities it hopes will become future customers through community meetings held in migrant-dense areas such as Florida and Texas. Through the “Advisor Program,” Majority team members, who are also immigrants, talk about the company’s culture in the native languages of their potential clients. The company also leverages external institutions such as local consulates to engage migrants in specific areas.
Choose your partners wisely
From an infrastructure perspective, the company wants to partner with companies that “act based on real risk and not bias,” Larsson said. The company provides banking services through Axiom Bank and its debit card is Visa. “We started by obtaining our MTL remittance licenses in several states, which was the beginning of building a robust compliance program,” he said.
This slow and steady strategy, according to Larsson, is what allowed Majority to get through the fintech winter. “The last few years in the fintech sector have been a slaughterhouse for neobanks, many of which have failed to overcome the crisis. We were the first fintech to focus on US immigrants, and there has been a competitor in nearly every diaspora we serve. Unlike many of our competitors, we managed to survive the crisis because we had laid a solid foundation with the suite of services we created,” he said.
The company’s latest round was its fifth in four years, and Larsson believes this brings the company closer to profitability. “We will continue to develop our product and plan to expand it to include credit-related assets. We also continually create redundancies to manage risk, as many of our products rely on multiple partnerships with banks,” he said.
The app of the majority
Source
Lloyds Banking Group and Nationwide have joined an £11m Series A funding round in Scottish artificial intelligence fintech Aveni.
The investment is led by Puma Private Equity with additional participation from Par Equity.
Aveni creates AI products specifically designed to streamline workflows in the financial services industry by analyzing documents and meetings across a range of operational functions, with a focus on financial advisory services and consumer compliance.
The cash injection will help fund the development of a new product, FinLLM, a large-scale language model created specifically for the financial sector in partnership with Lloyds and Nationwide.
Joseph Twigg, CEO of Aveni, explains: “The financial services industry doesn’t need AI models that can quote Shakespeare, it needs AI models that offer transparency, trust and, most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, vetted by financial services experts for specific financial services use cases.
“FinLLM’s goal is to set a new standard for the controlled, responsible and ethical adoption of generative AI, outperforming all other generic models in our selected financial services use cases.”
Robin Scher, head of fintech investment at Lloyds Banking Group, says the development programme offers a “massive opportunity” for the financial services industry by streamlining operations and improving customer experience.
“We look forward to supporting Aveni’s growth as we invest in their vision of developing FinLLM together with partners. Our collaboration aims to establish Aveni as a forerunner in AI adoption in the industry, while maintaining a focus on responsible use and customer centricity,” he said.
Treasury Risk Consulting Firm White Matter Alert On Monday he announced the acquisition of a 90% stake in the fintech startup Fair payment for an undisclosed amount. The acquisition will help White Matter Advisory expand its portfolio in the area of cross-border remittance and fundraising services, a statement said. White Matter Advisory, which operates under the name SaveDesk (White Matter Advisory India Pvt Ltd), is engaged in the treasury risk advisory business. It oversees funds under management (FUM) totaling $8 billion, offering advisory services to a wide range of clients.
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White Matter Advisory, based in Bangalore, helps companies navigate the complexities of treasury and risk management.
Fairexpay, authorised by the Reserve Bank of India (RBI) under Cohort 2 of the Liberalised Remittance Scheme (LRS) Regulatory Sandbox, boasts features such as best-in-class exchange rates, 24-hour processing times and full security compliance.
“With this acquisition, White Matter Advisory will leverage Fairexpay’s advanced technology platform and regulatory approvals to enhance its services to its clients,” the release reads.
The integration of Fairexpay’s capabilities should provide White Matter Advisory with a competitive advantage in the cross-border remittance and fundraising market, he added.
The release also states that by integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.
Rakuten (Japan:4755) has released an update.
Rakuten Group, Inc. and Rakuten Bank, Ltd. announced a delay in the reorganization of Rakuten’s FinTech Business, moving the target date from October 2024 to January 2025. The delay is to allow for a more comprehensive review, taking into account regulatory, shareholder interests and the group’s optimal structure for growth. There are no anticipated changes to Rakuten Bank’s reorganization objectives, structure or listing status outside of the revised timeline.
For more insights on JP:4755 stock, check out TipRanks Stock Analysis Page.
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White Matter Advisory, which operates under the name SaveDesk in India, has announced that it is acquiring a 90% stake in fintech startup Fairexpay for an undisclosed amount.
This strategic move aims to strengthen White Matter Advisory’s portfolio in cross-border remittance and fundraising services.
By integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.
White Matter Advisory, known for its treasury risk advisory services, manages funds under management (FUM) totaling USD 8 billion.
Founded by Bhaskar Saravana, Saurabh Jain, Kranthi Reddy and Piuesh Daga, White Matter Advisory helps companies effectively manage the complexities of treasury and risk management.
The SaveDesk platform offering includes a SaaS-based FX market data platform with real-time feeds for over 100 currencies, bank cost optimization services, customized treasury risk management solutions, and compliance guidance for the Foreign Exchange Management Act (FEMA) and other trade regulations.
Fairexpay is a global aggregation platform offering competitive currency exchange rates from numerous exchange partners worldwide. Catering to both private and corporate customers, Fairexpay provides seamless money transfer solutions for education, travel and immigration, as well as simplifying cross-border payments via API and white-label solutions for businesses. Key features include competitive currency exchange rates, 24-hour processing times, extensive currency coverage of over 30 currencies in more than 200 countries, and secure, RBI-compliant transactions.
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