Black America-focused fintech Kinly raises $ 15 million

Kinly, a neobanking startup focusing on underbanked Black leads, was officially launched on Monday and announced $ 15 million in Series A financing, the company told Axios exclusively.

Why it matters: Kinly is among a growing class of neo-banks who believe they can better meet customer needs by focusing on a tighter demographic than the latest generation of challenger banks, which sought to serve wider markets.

Special, the company has developed an early niche among black millennial women, with 70% of the 22,000 beta users and over 300,000 on the waiting list from that demographic.

Details: The $ 65 million Series A raise, valued at $ 65 million, was led by Forerunner Ventures, with the participation of Point 72, Anthemis Group, Kapor Capital, actress Gabrielle Union, basketball star Kevin Durant and former professional football player Marshawn Lynch.

• The company has previously raised around $ 5 million, and was launched in beta last year.
• Kinly offers overdraft protection, payroll advances and no monthly fees, and plans to offer crypt0 and stock trading later this year.

Context“The next chapter and the opportunity for investors and entrepreneurs will be winners by demographics and not necessarily by product,” Index Ventures partner Mark Goldberg told Axios in May. Other investors seem to share his feelings.

• Greenwood, focused on sub-banks with a specific interest in the Black and Latino community, raised $ 40 million last year.
• Cheese raised $ 3.6 million for its digital bank targeting Asian-American society. Last summer, Daylight raised millions for the LGBTQ consumer base.

BackgroundEncouraged to take action after the assassination of George Floyd, Donald Hawkins founded the Atlanta, Georgia-based company in 2020 with the goal of helping to close the wealth gap between black and white Americans.

• “We believe that if black women win, society as a whole wins. She teaches her children, nieces and nephews, brothers and sisters,” Hawkins said. “If we really hit the way we want with black millennial women, we could potentially stop the next generation of Black America from joining the same path that so many of us have gone through.”
• Younger married women are increasingly making the financial decisions of the family, according to a recent study by Merrill Lynch Wealth Management.

How it makes money: Kinlys’ revenues are currently largely dependent on brokerage fees, although they are also paid by referring customers to other financial products.

• High customer acquisition costs have been one of the biggest problems for the latest generation of neo-banks. Hawkins says, however, that Kinly has been able to keep costs low (to under $ 20 per head) because the community shares a lot online.