Majority, a challenger bank for immigrants, has raised $27m in a new funding round from tech celebrities such as Klarna founder Victor Jacobsson and PayPal dynamo Peter Thiel.
“We did plan to raise money later, but Valar Ventures, who led the round, heard us when we mentioned that we wanted to accelerate our expansion,” Magnus Larsson, Majority’s CEO, told Dagens Industri. “When you’re building something big, then you’re always wishing for two things: time and money. This round will provide us with both.”
Valar Ventures was founded by PayPal founder Thiel and has previously backed fintech heavyweights like Wise and N26.
Other backers returning for Majority’s Series A raise included buy-now-pay-later quadradecacorn Klarna’s co-founder Jacobsson, and iZettle co-founders Jacob de Geer and Magnus Nilsson. Avid Ventures and Heartcore Capital also backed the round.
Founded in 2019, the company today has offices in Sweden and in the US. The Series A round comes six months after Majority secured a $19m seed financing round. To date, the startup has raised $46m.
Majority will use the money to open a new Miami office, up its headcount and to roll out new services in the US for migrants who lack social security numbers and therefore have limited access to financial services.
Majority another challenger bank for minorities
Majority is part of a new wave of challenger banks that focus on supporting people from different minorities. Neobanks themselves are nothing new – they’ve been around for the better part of the past decade.
“Digital-only banks are a growing wave of consumer-centric banking services with lower fee and higher interest rates on deposit,” GlobalData described neobanks in a recent thematic research report. “They eliminate the need of a physical branch in most cases, thereby considerably reducing costs for banks.”
Most challenger banks focus on acquiring mass appeal, ensuring that as many people as possible will sign up for their services. However, this approach comes with the inherent risk for people from different minorities of being locked out from these services.
Immigrants, people of colour, members of LGBTQ+ communities and people with disabilities are among the people who risk falling between the cracks.
Minority-focused challenger banks like Purple, Pride Bank, First Boulevard, Greenwood, Paybby and Majority try to bridge that gap. Majority has now improved its ability to do so with the new funding round.