Main Highlights:
- Esusu, a fintech business focusing on immigrant and minority groups and offering rent reporting and data solutions for credit development, revealed Thursday that it had raised $130 million in a Series B round of investment.
- Esusu is valued at $1 billion in the transaction, making it one of few black-owned unicorns in the United States and overseas.
- SoftBank Vision Fund 2 led the fundraising, with the Jones Feliciano Family Office, the Lauder Zinterhofer Family Office, the Schusterman Foundation, the SoftBank Opportunity Fund, Related Companies, and Wilshire Lane Capital also participating.
Over 100 million Americans spend an average of $1,100 (or more than $1.4 trillion annually) on their highest monthly family expenditure: rent. However, statistics indicate that 90% of these individuals do not receive credit for paying their rent on time. Subsequently, approximately 45 million people in the United States lack credit ratings, according to a 2020 Consumer Financial Protection Bureau report. The majority of this demographic is economically disenfranchised due to their heritage and race.
Esusu, a fintech company that focuses on immigrant and minority populations and provides rent reporting and data solutions for credit creation, announced Thursday that it secured $130 million in a Series B round of funding. The investment values Esusu at $1 billion, making it one of few black-owned unicorns in the United States and abroad. The financing was headed by SoftBank Vision Fund 2, with participation from the Jones Feliciano Family Office, the Lauder Zinterhofer Family Office, the Schusterman Foundation, the SoftBank Opportunity Fund, and related companies Wilshire Lane Capital.
Credit ratings for immigrants and African Americans are lower or non-existent compared to other ethnicities. They also face an increase in predatory loans, trapping them in a cycle of financial instability. As a result, while they require good credit ratings to generate wealth, they lack access to financing.
About the Founders
Co-founders and co-CEOs of Esusu Abbey Wemimo, a Nigerian-born American, and Samir Goel, an Indian-born American, both grew up in immigrant families and witnessed firsthand this financial marginalization. They founded the firm in 2018 to help this excluded population develop credit ratings and “use data to reduce the racial wealth gap” through rental payments.
The New York-based fintech collaborates with property owners and housing providers and currently serves 35% of the nation’s major landlords, according to the National Multifamily Housing Council (NHMC). Goldman Sachs, Related Companies, Starwood Capital Group, and Winn Residential partners.
Esusu tracks renters who opt-in to its platform’s on-time rental payment data and submits it to the three main credit bureaus–Equifax, TransUnion, and Experian–to help tenants improve their credit ratings. In this manner, tenants may gradually improve their credit ratings while Esusu assists property owners in mitigating the risk of launching evictions. It charges property managers and owners a setup cost of $3,500 and a monthly fee of $2 per unit. On the other hand, Renters pay a $50 yearly membership fee to credit agencies to submit their rental payment data.
Esusu’s Growth
According to the creators, Esusu has grown 600 percent year over year. Over 2.5 million houses now utilize its service, accounting for more than $3 billion in Gross Lease Volume (GLV) in the United States, up from 2 million homes and more than $2.4 billion in Gross Lease Value six months ago.
In April 2020, Esusu announced a rent relief fund following a study on its website that revealed 62% of its members would be unable to pay their rent on time due to the pandemic’s consequences. Nearly $500,000 was obtained through crowdsourcing and nonprofit impact investing programs. Two years later, the initiative continues to operate, and Esusu has scaled it to ensure the continued tenancy of thousands of renters. According to the Esusu creators, the industry has attracted partners with a combined value of more than $1.7 billion.
Wemimo and Goel stated in a statement that they launched Esusu intending to bridge the racial wealth divide and expand financial possibilities for low-to-moderate-income households in this country via the use of data. Creating and enhancing credit ratings help individuals, families, and communities achieve their long-term financial goals.
Esusu intends to utilize the capital to increase its workforce, accelerate expansion through product innovation, and establish the market’s most complete financial health platform.
Motley Fool Ventures, which led the company’s $10 million Series A fundraising last July, reinvested in this latest round of financing. Concrete Rose Capital, The Equity Alliance, Impact America Fund, Next Play Ventures, Serena Ventures, Sinai Ventures, and TypeOne Ventures increased their investments. Esusu has raised about $144 million in total.
Esusu joins a select group of black-led and black-owned enterprises worldwide that have attained the coveted unicorn value out of over 900 companies. Calendly, a scheduling app based in the United States, is valued at $3 billion; Zepz, a fintech based in the United Kingdom, is valued at $5 billion; Marshmallow, a digital insurance startup, is valued at $1.2 billion; and African fintech Flutterwave ($1 billion), Chipper Cash ($2 billion), and Interswitch ($1 billion) are valued at billions.