Comun
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If Latinos living in the US were an independent country, their GDP would be the 5th largest in the world. They account for a combined GDP of $2.8 trillion.
Also, over 12.5% are unbanked compared to just 2.5% of the white population.
Let’s dive in.
Together with:
Imagine this
After struggling to build the best life in your country, you decide to leave and seek new opportunities for your family in the US.
As you begin your adventure in the city, you understand the need for a US bank account to support your family and handle your expenses and finances.
Traditional banks decline your application because you don’t have a Social Security Number (SSN).
Determined, you turn to extensive online research and seek advice from others in a similar situation.
Eventually, you come across Comun, a financial app that is easy to use and manage your finances without the need for an SSN.
Explain it like I'm five
Comun is a neo-bank (digital bank) made for Latinos living in the US.
They allow anyone to open an account without a Social Security Number.
Clients can easily handle their finances, from making payments and tracking expenses to checking balances and transferring money. Plus, they can withdraw cash from thousands of cashiers without fees and get the added benefit of receiving their payroll days before it's due.
The app is designed in Spanish, ensuring smooth navigation and communication for everyone.
Founders aim to empower families to succeed in both their finances and the US with a financial partner they can trust and understand.
The ABCs
Industries: FinTech
Headquarters: New York
Year Operations Started: 2021
Team Size: 28
Raised: US$4.5M (Seed)
Accelerator/Investors: Costanoa Ventures, South Park Commons, FJ Labs, Animo Ventures, Goodwater Capital
Business Model: Banking
Other players:
Background check
What we like:
Language barrier: Spanish-first app is a crucial advantage; building trust and community among Spanish-speaking customers has helped increase customer loyalty. More than 41 million native Spanish speakers live in the US.
Opportunity: US Hispanic population reached 62.5 million in 2021, up from 50.5 million in 2010. That’s a 19.5% increase and it’s not slowing down.
Customer acquisition: Founders claimed that acquiring clients was one of the biggest obstacles they thought they would face. To their surprise, their CAC (Customer Acquisition Cost) was much lower than expected. In a few months, they have been able to onboard tens of thousands of clients.
The solution: Both founders have experienced first-hand the hassle of navigating the banking system as immigrants. Before starting Comun, both founders talked to dozens of immigrants to understand the problems immigrants face. They began building and have continued developing new features directly from their user base struggles.
Remittances: Many clients have asked for the option to send money back home. This is a $140B industry, and Comun aims to be a part of it. The team has been working hard on this feature, which will be available soon.
Road Blocks:
Building trust: Most Latinos in the US come from countries where the banking system is different and may not be familiar with the concept of a neo-bank.
Support: As mentioned above, support will be a main challenge due to no face-to-face customer support. We all have had bank problems. First, we try to solve the problem within the app, then we call and if we can’t find a solution; what do we do? We go to the bank.
Compliance and Regulation: Comun may lack the capability and resources of traditional banks when it comes to compliance, regulation, and risk management. This has made it challenging for neobanks to navigate the complex regulatory environment and ensure compliance with various laws and regulations.
Risk Exposure: Neobanks have higher liquidity risks, as liquid assets held by neo-banks relative to their deposits tend to be lower than what would be held by traditional banks.
The Architects
Andres Santos - Co-founder & CEO. MIT MBA’21. Previously @ FJ Labs.
Abiel Gutierrez - Co-founder & CTO. Previously @ Brex.
Request intro with founders by sending an email to gabriel@readrunway.com
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Headlines Corner
Top LatAm entrepreneurs have identified these as the main challenges for raising capital in 2023. (Contxto)
Construex, a Mexican B2B marketplace connecting construction, architecture, and design, recently secured a $4M investment round from undisclosed investors. (Crunchbase)
Invariantes revealed the introduction of a $30M fund to invest in startups and emerging venture capital funds across the United States and Latin America. (Latam List)
Foodology, a Colombian network of dark kitchens, successfully raised a funding round of $17M from prominent investors a16z, Chimera, and 30N Ventures. (Hyper Latam)
X (Twitter’s rebrand) just hit a record of users. Over 541M users were active on the app last month. (X)
Founders Bookmarks
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There´s a heated debate right now. Are unlimited vacations good for culture?
Here is a guide to the different types of funding for your early-stage startup.
Comun
Excelente articulo.