Esusu turns unicorn with SoftBank Vision Fund 2-led $130 million funding – TechCrunch

Startups

More than 100 million Americans spend an average of $1,100 (more than $1.4 trillion per year) on their biggest monthly household expenses: rent. But according to reports, 90% of these people don’t get credit for paying their rent on time.

At a sub-level, more than 45 million people in the U.S. have no credit scores, according to a 2020 report from the Consumer Financial Protection Bureau. Most of these demographics are: financial marginalized because of their background and race.

Esusu, a fintech targeting immigrant and minority groups and offering rent reporting and data solutions for credit-building, said Thursday it has raised $130 million in a Series B fundraising round.

The investment gives four-year-old Esusu a $1 billion valuation, making it one of the few black unicorns in the US and worldwide.. SoftBank Vision Fund 2 led the funding round, with participation from Jones Feliciano Family Office, Lauder Zinterhofer Family Office, Schusterman Foundation, SoftBank Opportunity Fund, Related Companies and Wilshire Lane Capital.

Immigrants, especially African Americans, have lower or nonexistent credit scores than other populations. To a large extent, immigrants are also witnessing more predatory lending, putting them into a cycle of financial insecurity. So while they need strong credit scores to build wealth, they don’t have access to build credit.

Esusu’s co-founders and co-CEOs, Nigerian-born American Abbey Wemimo and Samir Goel grew up in immigrant homes and experienced this financial exclusion firsthand. They started the company in 2018 to build the credit scores of this marginalized group and “harness data to bridge the racial wealth gap” through rent payments..

The New York-headquartered fintech partners with real estate owners and housing providers, working with 35% of the largest landlords on the National Multiple families Housing Council (NHMC) list. Its partners include Goldman achs, Related Companies, Starwood Capital Group and Winn Residential.

Esusu records timely rent payment data from tenants who sign up for the platform and reports to the three major credit bureaus – Equifax, TransUnion and Experian – to bolster their credit scores. In this way, tenants can work their way to better credit scores, while Esusu helps property owners cut down on eviction initiation.

Esusu charges property managers and owners a start-up fee of $3,500 and $2 per month. Tenants, on the other handpay an annual subscription fee of $50 to report their rent payment details to credit bureaus.

The founders told TechCrunch that Esusu has a 600% annualized growth rate. More than 2.5 million homes are currently using the service, representing more than $3 billion in gross rental volume (GLV) in the U.S., an increase of 2 million homes and more than $2.4 billion in gross rental value, it reported. company six months ago.

In April 2020, Esusu launched a rent relief fund after conducting a survey on its platform that found that 62% of its users were unable to pay their rent on time due to the effects of the pandemic. The company raised nearly $500,000 through crowdfunding and non-profit impact mutual funds.

Two years later, that program is still running and Esusu has scaled it up to keep thousands of tenants in their homes. The program has delivered partners with more than $1.7 billion in their balance sheets, Esusu founders told TechCrunch.

“We founded Esusu with a vision to use data to bridge the gap between racial wealth and create more fair financial opportunities for low to middle income households in this country,” Wemimo and Goel said in a statement. “By establishing and improving credit scores, we strengthen financial identity and empower individuals, families and communities to achieve their long-term financial goals.”

Esusu plans to use the funding to scale up his team (triple the workforce to be exact), “turbocharge growth through product innovation, and build the most comprehensive financial health platform on the market.”

Motley Fool Ventures, the lead investor of the $10 million Series A round last July, has reinvested in this new funding round. Other existing investors Concrete Rose Capital, The Equity Alliance, Impact America Fund, Next Play Ventures, Serena Ventures, Sinai Ventures and TypeOne Ventures also doubled. In total, Esusu has raised more than $144 million.

With this funding, Esusu joins a coveted small group of black-led and proprietary startups worldwide that have earned the coveted unicorn rating from more than 900 companies. They contain US planning app calendly valued at $3 billion; UK-based fintech Zapz at $5 billion and digital insurance start-up Marshmallow at $1.2 billion; and African fintechs Flutterwave ($1 billion), Chipper Cash ($2 billion) and Interswitch ($1 billion).

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