The company also announced that starting today it will begin rolling out banking membership services to migrants in the country lacking US Social Security Numbers (SSN), in an effort to reach the 5.4% of US households (7.1 million) that are unbanked, according to a FDIC 2019 financial services survey.
The announcement comes only six months after MAJORITY’s previous $19 million July seed round also led by Valar, and brings total funding to $46 million.
The company says it plans to use the funding to open a new U.S. headquarters in Miami, rapidly grow its team across the US and Sweden, and begin scaling its advisor-based model into new communities.
“We did the seed round for building out our abilities to open up for more communities. We’ve been present in the smaller communities, and now [we] want to scale the model to prove for ourselves that our advisors sales model works well,” MAJORITY CEO and co-founder Magnus Larsson told FinLedger.
Larsson says that introducing the ability to open an account with a US SSN was a huge step for the company and the migrant community, and came from personal challenges he faced while living abroad. With the update, users will now be able to open up accounts with any international government-issued ID and proof of a US address (e.g. a utility bill).
The company has tailored its migrant banking services to each specific community, hiring local advisors for onboarding and supporting customers in their native languages. It also provides high-touch assistance through local meet-up spaces and provides community-driven informational resources to assist its migrant users.
“Looking at the data, the cost structures on the services that you usually encounter when you’re migrant are not rational. They are the ones that basically are paying the most,” Larsson said, explaining the upside-down fee structure for migrant services.
In order to curb those challenges and increase transparency, the company turned to a $5 per month subscription model to provide its FDIC-insured accounts, community discounts, no-fee remittances and at-cost international calling at one cost.
“We have instead turned the whole model upside down, and we’re charging a fixed subscription fee. Instead of paying $10 per transaction transfer with a remittance company, or paying $1 a minute sometimes for a call, we are giving the services at cost and charging a fee which we felt was the most fair way to build a good product,” he said.
MAJORITY has saved its Cuban and Nigerian members an average of $21 and $10 per month, respectively, and grown its subscriber user base ten-fold over the last year. The company is also now growing its revenue an average of 20% month-over-month, according to the release.
Looking ahead, MAJORITY plans to continue building out its migrant banking product for more communities and expand into those communities at a rapid pace. While he did not share specifics, Larsson also says MAJORITY is working to introduce new products in 2022.
“We want to be there and really be part of the community. When we start there, we want to stay. From a product perspective, there are so many routes and so many ideas and I’m going to have to share them later.”
In other recent fintech news, Numerated announced a strategic acquisition of Boston-based Fincura to continue scaling its SMB loan offering. The OCC also released its semi-annual risk report, citing increased organization risk due to cyber attacks and urging community banks to reassess initial risk assessments.