Nine months after raising a Series A round, Majority has raised tens of millions in both equity and debt financing for its mobile bank for migrants. The fintech announced today that it has raised a $37.5 million Series B, $30 million of which is in equity financing led by Valar Ventures and other existing investors, and the remaining $7.5 million in debt financing from an undisclosed U.S.-based commercial bank.
In a little over one year, Majority has raised a $19 million seed, $27 million Series A and now a $37.5 million Series B round. Yet, today’s round -- mostly fueled by existing investors -- feels a bit different, according to CEO and co-founder Magnus Larsson.
“We didn’t plan to raise now,” he said. “Getting an offer to actually do a round when everything around is shaky, and gives you the opportunity to just focus on what you want to do makes it quite an easy choice.” The founder pointed out that tons of companies have needed to downsize over the past few months, a shuffling that could help Majority build a better team in the future.
Majority makes money through a $5.99 per month membership fee. It offers bank accounts, debit card, community discounts, free international money transfer and discounted international calling. The company did not share specifics on revenue, beyond noting that revenue has increased 5x, and monthly transaction value has increased 4x, over the past year.
“One of our conclusions was that we're building a product that people want, that people are ready to pay for,” he said.
Building an immigrant-focused service is as in demand as it is challenging. The startup has swaths of well-funded competition, including -- but not limited to -- Fair, TomoCredit and Welcome. Unlike Welcome, which initially is just focused on the Hispanic community within the United States, Majority is focused on all migrants.
Furthermore, access for the unbanked continues to be a difficult area to disrupt. Earlier this year, Majority announced that users can register for an account without needing a social security number or U.S. documentation, and instead use an international government-issued ID and proof of U.S. residence -- a move the startup says could make its services more accessible.
“We're building a digital product solving a very analog or an offline problem today, from buying to sending money,” he said.
The financial services startup has opened physical locations across Florida, in Miami, Hialeah and Orlando, and Houston, Texas. The locations help the team be closer to the communities it is serving. Creating physical spaces has helped the Majority gain trust with consumers, Larsson explained, showing that the company won’t just show up, handle money and disappear in a few weeks due to the volatility of startups. It’s a different playbook from how traditional banks are reacting to the wave of financial innovation; many traditional banks are shutting down physical locations and branches. “When you handle people’s money, they want to know that you’re for real,” he added.