Fintech
Immigrant banking platform Majority gets $20 million thanks to 3x revenue growth
It can be difficult to move to a new country, which is even more difficult if you are not used to that particular country’s banking style.
The rise of immigrants in the US: About 50 million foreign-born people currently live in the US, according to immigration think tank Center for Immigration Studies – offers startups the opportunity to adapt financial services to this population. Companies like it Commun, Club, Raise AND Welcome Technologiesfor example, helping Latino immigrants open bank accounts.
Magnus Larsson, himself an immigrant from Sweden, ran into similar problems and set up a branch in Miami Majority in 2019 to address them. By paying a membership fee of $5.99 a month, migrants can open a bank account and get a debit card, community discounts, fee-free international money transfers and discounted international calls. There is also a peer-to-peer payment feature.
Accounts do not require a Social Security number or U.S. documentation, only an international government-issued ID and proof of U.S. residency. They also have no overdraft fees or minimum balance requirements. Additionally, users have access to Majority’s “Advisor Program,” a nationwide network of trained support staff who are themselves immigrants.
“For many customers, we are the primary relationship that they have when it comes to their financial services and services to connect with their country,” Larsson told TechCrunch. “Most migrants are hit with numerous predatory taxes. When it comes to financial services, remittances and cross-border money transfers, you pay a fixed fee, but we are eliminating other fees.”
Magnus Larsson, founder and CEO of Majority. Image credits: Majority
The majority’s approach has caught on: Over the past year, the company has tripled its revenue while the number of users has doubled. In April, Majority reached $40 million in annual recurring revenue and $200 million monthly in new deposits, Larsson said. Overall, transaction volume grew five-fold, while remittances grew four-fold in 2023. Remittances are how someone in the United States sends money to someone across the border, such as family members back home .
TechCrunch has been following Majority’s growth path since it closed in $19 million suit round in 2021. Since then the company has continued to raise a $27 million Series A and several tranches of Series B funding, most recently a $9.75 million round in 2023, which included support from existing investors Valar Ventures and Heartcore Capital.
All this growth has led Larsson to consider raising additional financing to help finance more growth. Of the $20 million in capital raised, $12.5 million is equity, another Series B tranche. The round was led by fintech founders, including Klarna cofounder Victor Jacobsson and Swedish serial entrepreneur Hjalmar Winbladh. Valar Ventures, Heartcore Capital and another existing investor Avid Ventures returned to participate, and Zettle co-founders Magnus Nilsson and Jacob de Geer also participated.
The rest of the money amounted to $7.5 million in the form of debt from an unnamed bank. In total, Majority has raised $90 million in equity funding to date. Larsson also declined to provide the company’s valuation, but said it was a flat round.
Additionally, the company recently hired Abhi Pabba as Chief Risk Officer. Pabba previously served as Apple’s head of credit risk for Apple Card. He will support Majority’s upcoming product expansion efforts.
With the new funding, Larsson plans to continue developing products, including helping users establish a credit score and access credit products. The company is also building layoff products to better manage risk.
The recent financing is also the final step toward profitability, Larsson said.
“This has always been the goal and it could happen as early as next year,” he said. “We are at that stage where we know our customers well, we know they love our product and we know how to scale this market very well. What we’re doing is making people thrive and succeed better and faster. It’s something that’s needed, and going forward, we’re looking at how we can make that happen for 300 million people.”