Black-owned fintech reaches hyped unicorn status, gets over $1 billion in investments for future growth

Black-owned fintech reaches hyped unicorn status, gets over $1 billion in investments for future growth

Key Esusu investors include Serena Williams, Concrete Rose, Motley Crew Ventures, The Equity Alliance, and Softbank

By BCN Executive Editor Wesley Brown – Jan. 28, 2022 – A Black-owned fintech whose list of investors range from America tennis star Serena Williams to U.S. stock picker Motley Fool and Japanese multinational conglomerate Softbank has advanced to the vaunted unicorn status, a hard-earned but often elusive goal for privately held startups with a $1 billion evaluation.

Esusu, a Wall Street startup founded in 2018 by Nigerian-born American Abbey Wemimo and Indian American Samir Goel, on Jan. 25 announced a new valuation of $1 billion after closing a $130 million round of Series B funding. The funding round was led by SoftBank Vision Fund 2 with participation from Jones Feliciano Family Office, Lauder Zinterhofer Family Office, Motley Fool Ventures, Schusterman Foundation, SoftBank Group’s SB Opportunity Fund, Related Companies, and Wilshire Lane Capital.

Today, Esusu’s rent reporting platform captures rental payment data and reports it to credit bureaus to boost credit scores. This allows tenants to build and establish their credit scores while helping property owners increase revenue, lower evictions, and fill vacancies powered by differentiated data and insights.

Esusu new multimillion dollar round of equity investment makes it one of the few Black-owned startups to reach unicorn status both in the U.S. and globally, company officials said. Esusu’s Series A round led by Motley Fool Ventures Managing Partner Ollen Douglass positioned the company to accelerate market adoption and become the leading platform in the rental market sector, growing the company close to 600% year-over-year in 2021.

“We founded Esusu with the vision of using data to bridge the racial wealth gap and create more equitable financial opportunities for low-to-moderate-income households in this country,” company founders Wemimo and Goel said in a statement. “By establishing and improving credit scores, we are strengthening financial identities while empowering individuals, families, and communities to meet their long-term financial goals.”

In the startup world, many early-stage companies get their first round of funding by tapping into loans and financing from so-called angel investors. That funding typically comes from close relatives and friends and the company founder has invested his own money. The next round of Series A, Series B and Series C funding, are the next levels of seed funding where startup entrepreneurs seek new capital from the financial community or venture firms that invest in exchange for stake in the firm.

With plans to triple its employees, Esusu said it will use the Series B capital infusion to scale the team, turbocharge growth through product innovation, and build the most comprehensive financial health platform in the market.

Serena and the Investors

Serena Williams’ namesake Serena Ventures has investments in over 50 companies across multiple industries. including businesses that touch e-commerce, food & beverage, fashion, health & wellness, social good, and more. The 23-time Grand Slam winner is a key investor in Black-owned fintech Esusu and recently was named as an advisor to the board of Paris-based Sorare, a fantasy sports game that use blockchain current to trade online.

Existing investors that have already bought stakes in the Nigerian tech startup include Concrete Rose Capital, The Equity Alliance, Impact America Fund, Next Play Ventures, Serena Ventures, Sinai Ventures, and TypeOne Ventures. Each of those venture funds are led by Black founders or focus their investments strategy on diversity, equity and inclusion with total funding in Esusu over $144 million.

Nearly six months ago, Esusu received a huge boost of recognition in Wall Street’s startup investment community when Serena Williams’ startup investment vehicle helped raise $10 million in Series A funding for Esusu. The funding round as noted, led by Motley Fool Ventures, also included The Equity Alliance, Predictive VC, and other angel investors.

For the Esusu venture, previous seed investors besides Serena Ventures that participated in the latest funding round include Concrete Rose Capital, Impact America Fund, Global Impact Fund, Next Play Ventures, and Zeal Capital Partners, bringing the total investment to $14 million at the time.

“Esusu is really focused on credit building and creating pathways to financial inclusion for not only working families but for individuals as well,” said Williams, founder of the investment vehicle for the 23-time Grand Slam singles title holder. “Their services also make rent reporting seamless – finally giving renters credit for what often is their largest expense every month. Last year, of course, was the COVID-19 pandemic. It created an unemployment and housing crisis that left many renters struggling to make their rental payments on time, and they were often facing eviction. We saw Esusu respond immediately with rent relief efforts – creating zero-interest housing stability loans to address this problem head-on.”

As for the Esusu venture, company officials the startup’s zero-interest housing stability fund has seen an increase in demand due to the rise in unemployment, evictions, and a decline in financial stability caused by the COVID-19 pandemic. With over $70 billion in outstanding rental payments, Esusu’s zero-interest rent relief efforts kept families in their homes, while also empowering them with the benefits of rent-reporting and credit building.

“We invested in Esusu’s mission and have a strong conviction in the potential of this space,” added Williams. “The tech-enabled model really creates win-win situations for stakeholders from renters to landlords. Our significant investment in Esusu will help the company scale and unlock more financial opportunity for people.”

Since it was launched in 2014, Serena Ventures has provided seed capital for more than 50 startups with an aggregate value exceeding $33 billion. In March 2021, Serena Ventures filed a Form D notice with the federal Securities and Exchange Commission detailing a sale of its privately held stock but declined to disclose the amount.

Earlier this month, the business-minded tennis star was also named as an advisor to the board of directors for the fast-growing Sorare fantasy-sports platform. Based in Paris, Sorare is a fast-growing player-owned fantasy sports game that uses non-fungible tokens (NFTs) stored on blockchains to trade and collect winnings online.

In her newly appointed role first announced on Jan. 20, Williams will provide guidance to the board on a range of topics, including developing Sorare’s relationship with athletes around the world, advising on Sorare’s strategies to expand into new sports categories, including women’s sports, as well as future impact initiatives for making Web3 more inclusive and diverse.

“Serena Williams is among the most important figures in sports and culture, who has redefined the modern athlete and entrepreneur, including her unprecedented early stage investing successes,” said Nicolas Julia, CEO at Sorare. “The strategic counsel that Serena will bring in building one of the most iconic sports entertainment brands is invaluable. I’m thrilled to have her join the team. Together, we’ll forge new ways for fans to engage with their favorite athletes.”

Wall Street bona fides

Other noted investors in the Black-owned startup include Motley Crew and SoftBank Advisers. Founded around the same time as Esusu in 2018, Motley Fool Ventures announced a year ago that it was investing $5 million of its $150 million fund into 14 other venture capital funds directly addressing underrepresentation in venture community (VC). Those 14 funds have 28 partners, company officials said, of which 54% are women and 71% are from ethnically underrepresented populations. Geographically, the funds have a presence in the Bay Area, Los Angeles, Seattle, Denver, Texas, Chicago, Atlanta, Washington, DC, and New York.

“When we launched this program, roughly 40% of our invested capital went to women-led companies, and the majority of our capital to companies with diverse leadership teams. However, Black and Brown founders only constituted 8% of our portfolio. Further analysis revealed that we were not seeing enough startups founded by people of color. Just to be clear, we don’t believe we had a ‘pipeline’ problem,” said Douglas said of the investment vehicle for the Alexandria, Va.-based financial advice company. “We had a “fishing in the same pond” problem – an all-too-common circumstance in VC that transpires from attending the same pitch events, or hearing the same whispers about up-and-coming (but non-diverse) companies, or monitoring standard industry sources. Even as we committed ourselves to pushing these aside and finding new sources of deal flow, the results didn’t meet our goals.

With Softbank Investment Advisers, Esusu gets the financial backing of a global conglomerate that has invested more than $100 billion in fintech, alternative reality, robotics, telecoms, and other innovative technologies. The London-based investment manager is a wholly owned subsidiary of Softbank Group, the Tokyo-based global investment giant and major shareholder in U.S.-based companies like Sprint, T-Mobile and We Work.

Vikas Parekh, managing partners at SoftBank Investment Advisers, said by using alternative data to enhance credit scores, said Esusu can open financial opportunities for millions of underserved American households.

“We believe that Esusu has built a leading rental reporting and financial platform through partnerships with renters, property owners, and lenders that can become the central data hub for consumer financial health,” said Parekh. “We are thrilled to partner with Samir Goel, Abbey Wemimo and the team to support their vision to generate equitable financial access for everyone.”

Today, Esusu is available in 2.5 million homes representing over $3 billion in Gross Lease Volume nationwide. Esusu works with 35% of the largest landlords on the National Multifamily Housing Council (NMHC) list. Partners include BH Companies, Camden Property Trust, Cushman & Wakefield (formerly Pinnacle), GoldOller, Goldman Sachs Asset Management, Harbor Group, L+M Development Partners, Jonathan Rose Companies, Morgan Properties, Related Companies, Starwood Capital Group, Stoneweg, Winn Residential, and more.

The company also recently announced a joint initiative with Freddie Mac Multifamily in November, in which Freddie Mac will provide closing cost credits to its borrowers using Esusu. According to Esusu’s mission statement, credit is fundamental to financial stability and upward mobility, but financial exclusion makes the American dream unattainable for millions. Every month, over 109 million Americans spend on average $1,100 in rent (over $1.44 trillion annually) which is often their largest monthly household expense.

Despite this, over 90% of renters do not get credit for paying rent on time, leading to financial exclusion. Esusu bridges this gap by reporting on-time rent payments to the three major credit bureaus, (Equifax, TransUnion, and Experian) helping renters across the nation establish and improve their credit scores to unlock quality financial products.

According to Wemimo and Geol, Esusu operates on the premise that where you come from, the color of your skin, and your financial identity should never determine where you end up in life. Growing up in immigrant families in the U.S. without a financial or credit footprint, the startup entrepreneurs said they both experienced financial exclusion firsthand. They started the company only three years ago with a mandate to empower the 45 million Americans who don’t have credit scores and the millions more who are marginalized due to background, race, and zip code.

To learn more about Esusu, go to www.esusurent.com. They can also be found on Facebook @myesusu and on Twitter @getesusu.

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