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.
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