Fair, a neobank and financial services platform, is set to launch nationwide in April to provide its banking, lending, investment and retirement services.
Fair has already raised $20 million in 40 days, the company’s founder and CEO Khalid Parekh said in an interview with FinLedger. Parekh explained that Fair raised the funds from individual retail investors, friends, family and others. The fundraise gives the company a $200 million valuation, Parekh said.
The funding will mostly be used for marketing, public relations and continued technological development, he said.
Although Fair is doing a national launch in April, Parekh explained that the company is doing a testing period launch for family and friends in March. Fair has about 30 employees, and the company reports that Coastal Bank will operate as its sponsor bank.
Parekh is the founder, chairman and CEO of Houston-based technology and private equity firm Amsys Group. He explained that he founded Fair to have a platform that has pro-consumer equity-based financing that will offer equity-based lending for home, auto and business. The company is a mobile-first alternative that has features including free international money transfers, an up to two percent annual dividend account and is launching a “buy now, pay later,” feature.
“What really differentiates us from the competition, [is that] there is no competition. That’s how I always positioned ourselves — Fair does not have competition, because Fair is not a one trick pony,” Parekh said. “We have a whole suite of 13 products that we are going with. We are different.”
Fair is focused on three demographic groups, and Parekh explained he is heavily focused on serving immigrant and unbanked people in America. Also, Fair is launching its app in three languages: English, Spanish and Arabic.
“In most American banks, you have to have social security to open up a bank account. But, Fair has built an AI-based, machine learning-based technology where we can use somebody’s passport, and if that person is legal in America, we can verify that against an OFAC database and make them a member of the Fair platform.”
Fair is also focused on serving low-income Americans who are distrustful of traditional banking and thirdly, people interested in ESG and socially responsible investment mechanisms.
The company reports that it has about 50,000 pre-launch subscribers waiting to join the platform, but in the next 24 to 36 months the company has ambitions to ramp up to 1 million subscribers.
When I asked Parekh if he was going to have another funding round for Fair later this year or in 2022, he responded by saying it all depends on the trajectory of growth for the company. The company has an “Investor Inquiries” form on its website.
“We have already been offered a couple SPAC’s that want to merge with us, it just depends upon how fast we can grow, how many users we can accumulate,” he said. “But instead of doing another round of $50 million or $100 million round, we might just opt in for a SPAC transaction, if that is the right path moving forward for the company. But again, we don’t know that yet. Only time will tell.”
According to the Houston Business Journal, Parekh launched a new business in 2017 called Amchart. Amchart seeks to digitize patient medical records with blockchain technology. In 2018, the Houston Business reported that “He’s raised about $22 million so far and plans to raise around $100 million for the initial coin offering for the product.”